Executive Compensation

On June 26, 2013, the government published an interim rule that implements Section 803 of the National Defense Authorization Act for Fiscal Year 2012 by extending the application of the executive compensation benchmark from senior executives to all contractor employees working on Department of Defense, NASA, and Coast Guard contracts. The interim rule is effective as of its issuance date (June 26, 2013).

The executive compensation benchmark was established in 1998 by the Office of Federal Procurement Policy (“OFPP”) Act and is intended to reflect “the median amount of the compensation provided for all senior executives of all benchmark corporations for the most recent year for which data is available.” The Administrator, Office of Federal Procurement Policy, determines the executive compensation benchmark amount, which is published on the Office of Management and Budget website. The benchmark amount does not limit the amount of compensation that an executive may receive, but caps the amount that will be allowable under the FAR compensation cost principle (48 C.F.R. § 31.205-6(p)). The current benchmark amount is $763,029.
Continue Reading New Executive Compensation Limits

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On September 20, hundreds of government contractors joined us for a webinar about the new executive compensation and first-tier subcontract award reporting requirements. It was a lively discussion and we explored some of the challenges relating to this new requirement. In case you missed it, the webinar is now available in its entirety by clicking

Please join us for a webinar on Monday, September 20 at 2 pm ET for a discussion of the new rules requiring many contractors to report information about executive compensation and awards to subcontractors.

During this webinar, we will cover many topics, including:

  • Which companies must report executive compensation information?
  • How is executive compensation calculated?

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We have previously provided information about the interim FAR Rule implementing the Federal Funding Accountability Act of 2006, as amended by the Government Funding Transparency Act of 2008. The Rule, which is already in effect, requires many government contractors to report information about their executives’ compensation, their first-tier subcontractors’ executive compensation, and information about their