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The mark‐to‐market valuation and executive pay package regulations within the 2009 US (Bailout) Emergency Economic Stabilization Act

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  • Jamal Ibrahim Haidar

Abstract

The paper shows that the effect of the Emergency Economic Stabilization Act (EESA) is ambiguous. It discusses the benefits and costs of mark‐to‐market valuation and design of executive pay package policies within the US 2009 EESA. It highlights how the mark‐to‐market valuation standard influenced financial institutions, explains why mark‐to‐market policy suspension proponents can support the EESA, and realizes how the Financial Accounting Standards Board (FASB) and Securities Exchange Commission (SEC) can count on the EESA while assessing the need and cost of the mark‐to‐market policy. Also, the paper discusses the promise of executive wage caps within the EESA. Moreover, it differentiates between executive pay packages pre‐ and post‐EESA policies.

Suggested Citation

  • Jamal Ibrahim Haidar, 2009. "The mark‐to‐market valuation and executive pay package regulations within the 2009 US (Bailout) Emergency Economic Stabilization Act," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 12(3), pages 189-199.
    • Handle: RePEc:taf:jecprf:v:12:y:2009:i:3:p:189-199
    DOI: 10.1080/17487870903105361
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    1. Hubbard, R. Glenn & Palia, Darius, 1995. "Executive pay and performance Evidence from the U.S. banking industry," Journal of Financial Economics, Elsevier, vol. 39(1), pages 105-130, September.
    2. Brian J. Hall & Jeffrey B. Liebman, 1998. "Are CEOs Really Paid Like Bureaucrats?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 653-691.
    3. Jensen, Michael C & Murphy, Kevin J, 1990. "Performance Pay and Top-Management Incentives," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 225-264, April.
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    Cited by:

    1. Michele Fratianni & Francesco Marchionne, 2010. "Banks’ Great Bailout of 2008-2009," Working Papers 2010-03, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    2. Jamal Ibrahim Haidar, 2012. "Sovereign Credit Risk in the Eurozone," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 13(1), pages 123-136, January.
    3. Ramirez Carlos D., 2011. "The $700 Billion Bailout: A Public-Choice Interpretation," Review of Law & Economics, De Gruyter, vol. 7(1), pages 291-318, November.
    4. Cicero I. LIMBEREA, 2009. "A Quantification Of The 2008-2009 US Bailout Package," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 3, pages 127-135, May.
    5. Jakob Bosma, 2011. "Communicating Bailout Policy and Risk Taking in the Banking Industry," DNB Working Papers 277, Netherlands Central Bank, Research Department.

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