BAPCPA Limits on Excessive Executive Compensation Ineffective According to Latest ABI Quick Poll
Contact: John Hartgen
BAPCPA LIMITS ON EXCESSIVE EXECUTIVE COMPENSATION INEFFECTIVE, ACCORDING TO LATEST ABI QUICK POLL
October 19, 2009 Alexandria, Va. — A majority of respondents to the latest ABI Quick Poll found that “key employee retention program” (KERP) provisions within the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) were ineffective in limiting excessive executive compensation. Fifty-four percent of respondents disagreed that the KERP provisions within BAPCPA were effective. Thirty-seven percent “strongly agreed” and 17 percent “somewhat disagreed.”
Twenty-four percent of respondents, however, thought that the KERP provisions within BAPCPA were effective in limiting excessive executive compensation. Twelve percent of respondents “agreed strongly” and 12 percent “somewhat agreed.” Twenty percent of respondents did not know or had no opinion on the issue.
The Quick Poll question was based on the amendment sponsored Sen. Edward Kennedy (D-Mass.) to the 2005 bankruptcy overhaul designed to stop chapter 11 debtors from handing out big bonuses to executives. The provision has been a source of controversy since Kennedy inserted the language. The KERP provision has thus far withstood several court challenges.
ABI members and members of the public were welcome to submit their response to the statement: “Sen. Kennedy is remembered for his 2005 KERP amendment to chapter 11. The law has been effective in limiting excessive executive compensation.”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. To access the results of previous ABI Quick Polls, please visit: http://www.abiworld.org/AM/Template.cfm?Section=Quick_Poll_Archive_2007&Template=/Quickpollarchive/Quickpollarchive.cfm.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 12,300 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.