You Thought Executive Compensation In Private Companies Was Actually Private?!? Not So For Many Federal Contractors


In the Obama Administration’s continuing quest for transparency, the federal government issued an Interim Rule on July 8, 2010, that requires many federal contractors and subcontractors to report and make publicly available the total compensation of their top five executives. The Interim Rule implements the Federal Funding Accountability and Transparency Act of 2006, as amended by the Government Funding Transparency Act of 2008, which requires covered contractors to report information on first-tier subcontracts and the total compensation of the top five executives for both direct contractors and first-tier subcontractors.

The Interim Rule notes that the “reporting requirements of the [Act] are sweeping in their breadth, and are intended to empower the American taxpayer with information that may be used to demand greater fiscal discipline from both executive and legislative branches of Government.” Although the sponsors of the legislation stated that “Government officials will be less likely to earmark funds for special projects if they know the public could identify how much money was awarded to which organizations and for which purposes,” the Interim Rule does not explain how reporting of executive compensation furthers this objective in any way.

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