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Federal Highway Administration Guidance on Executive Compensation Reporting Requirements under Section 1512 of the American Recovery and Reinvestment Act of 2009
September 1, 2009

Summary

  1. Recipients and subrecipients of Federal financial assistance must report executive compensation data if they meet the statutory reporting thresholds.  For the Federal-aid Highway Program, this means that the State, and any local agencies or other subrecipients of Federal-aid funds through the State, are subject to the executive compensation reporting requirement.

  2. Contractors working for a recipient (i.e., the State) or for a subrecipient (e.g., local agencies) do not have to report on executive compensation.

Background

Section 1512(c)(4) of the American Recovery and Reinvestment Act of 2009 (Recovery Act) requires reporting of data elements contained in the Federal Funding Accountability and Transparency Act of 2006 (FFATA).[1]  A 2008 amendment to FFATA mandates the disclosure of the names and total compensation of the five most highly compensated officers of an entity if:

  • The entity received 80% or more of its annual gross revenues in the preceding fiscal year from Federal awards, and

  • The entity received $25 million or more in annual gross revenues in the preceding fiscal year from Federal awards, and

  • The public does not have access to the information through Securities and Exchange Commission or Internal Revenue Service filings as specified in FFATA.[2]

On June 22, OMB issued guidance[3] concerning section 1512 reporting requirements for recipients and subrecipients of Federal financial assistance and their vendors.  Under the OMB guidance, recipients and subrecipients of Federal Recovery Act funds are subject to the executive compensation disclosure requirements in FFATA. 

For FHWA, this means the State (recipients) and any subrecipients like MPOs or local public agencies are subject to the executive compensation disclosure requirements if those entities trigger the reporting requirement based on the thresholds listed above.  While most section 1512 reporting is project-specific, the executive compensation data requirement focuses on information about the receiving entity.  State departments of transportation receive Recovery Act funds on behalf of the State itself.  For that reason, if the FFATA thresholds are met, a State should report on the five most highly compensated State officers.  Similarly, subrecipients such as counties and municipalities should determine their five most highly compensated officers at the entity-wide level, not the agency, department, or office level.  

The OMB guidance does not require recipients’ or subrecipients’ vendors to report on executive compensation.[4]  In the Federal-aid Highway Program, contractors working for State DOTs or their subrecipients are vendors[5] and are not required to disclose executive compensation information. 

It is important to note that contractors working directly for the Federal government are treated differently.  The relevant guidance for those recipients is provided in interim Federal Acquisition Regulation (FAR) clause 52.204-11.[6]


[1] Pub.L. 109-282, §§ 1 to 4, Sept. 26, 2006, 120 Stat. 1186, as amended Pub.L. 110-252, Title VI, § 6202(a), June 30, 2008, 122 Stat. 2387.

[2] The reports specified in the law are those filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986 [26 U.S.C.A. § 6104].

[3] See “Implementing Guidance for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009”, M-09-21 at http://www.whitehouse.gov/omb/memoranda_default/.

[4] Vendors are required to submit some other types of information.

[5] See the definition of vendor in the June 22, 2009 OMB guidance (M-09-21) at page 7.

[6]Interim Federal Acquisition Regulation (FAR) clause 52.204-11 can be found at: http://edocket.access.gpo.gov/2009/pdf/E9-7025.pdf.

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