Office of Federal Procurement Policy Cost Accounting Standards Board Executive Compensation, Benchmark Maximum Allowable Amount
For 2011, the allowable costs were set at $763,029!
The allowability of the compensation costs for the senior executives of Government contractors is capped by statute (10 U.S.C. 2324(e)(1)(p) and 41 U.S.C. 256(e)(1)(p)) at a benchmark executive compensation amount. The benchmark amount does not limit the amount of compensation that an executive may otherwise receive. However, the compensation costs in excess of the benchmark amount are unallowable costs for Government contract purposes. While the benchmark executive compensation amount is the maximum allowable amount of compensation costs for certain executives of Government contractors, the benchmark amount as applied to a particular executive is not necessarily a safe harbor. Without regard to the benchmark compensation amount, the allowable compensation costs for each affected executive are still subject to the Federal Acquisition Regulation and the Cost Accounting Standards as applicable and appropriate to the circumstances, e.g., reasonableness and allocability. The Executive Compensation Cap is implemented at FAR 31.205-6(p). Continue reading “As a Federal Employee and Taxpayer – I’m Tired of Paying for Your HIGH Salaries!”