Legislation has been introduced in the Senate that would limit the amount the federal government can reimburse contractors for executive compensation to the amount of the president’s salary, currently $400,000.
Contractors could still pay whatever they want to their executives, but the bill would limit taxpayer exposure. Contractors currently may charge up to $693,951 for the salaries of their top-five executives – but compensation may exceed that limit outside beyond those five executives.
The legislation, S-2198, the “Commonsense Contractor Compensation Act of 2012," introduced by Sens. Barbara Boxer, D-Calif., and Chuck Grassley, R-Iowa, would build on a measure included as part of the defense spending bill passed in December that sets a limit on taxpayer-funded salaries for defense contractor employees.
That bill extended the $693,951 salary cap – which has nearly doubled in the last 12 years – to all defense contractor employees, not just the top five. “There’s no justification for these payments to be higher than the salary of the president of the United States," said Grassley.
