House and Senate lawmakers are working on legislation that would limit the amount of executive compensation that contractors can bill the U.S. government.

 

The proposed change in law would cap total billable compensation for company leaders (that includes wages, salaries, bonuses and deferred compensation) at $693,951. According to figures compiled by Bloomberg, in 2010 the average executive at one of the top five defense contractors--Lockheed Martin, Boeing, Northrop Grumman, General Dynamics and Raytheon—took home $8 million.

 

A key difference in the competing bills is that the House version would apply the cap to all employees of contractors who do business with the Department of Defense, including scientists and engineers, while the Senate’s plan would apply the cap only to managers and executives.

 

The legislative effort follows news that the amount government contractors’ top executives have been making has more than doubled since the 1990s.

 -Noel Brinkerhoff

 

Pentagon May Cap Executive Pay Reimbursement at $694,000 (by Brian Friel, Bloomberg Government)

Government Ignores Law Limiting Executive Salaries of Contractors (by Noel Brinkerhoff, AllGov)