3 May 2006

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[Federal Register: May 3, 2006 (Volume 71, Number 85)]
[Notices]               
[Page 26114]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03my06-106]                         

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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy

 
Determination of Executive Compensation Benchmark Amount

AGENCY: Office of Federal Procurement Policy, OMB.

ACTION: Notice.

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SUMMARY: The Office of Management and Budget (OMB) is hereby publishing 
the attached memorandum to the heads of executive departments and 
agencies concerning the determination of the maximum benchmark 
compensation amount that will be allowable under government contracts 
during contractors FY 2006--$546,689. This determination is required 
under Section 39 of the Office of Federal Procurement Policy (OFPP) Act 
(41 U.S.C. 435), as amended. The benchmark compensation amount applies 
equally to both defense and civilian procurement agencies.

FOR FURTHER INFORMATION CONTACT: Julia B. Wise, Office of Federal 
Procurement Policy, (202) 395-7561.

Clay Johnson III,
Acting Director.

Memorandum for the Heads of Executive Departments and Agencies

From: Clay Johnson III, Acting Director.
Subject: Determination of Executive Compensation Benchmark Amount, 
Pursuant to Section 39 of the Office of Federal Procurement Policy, 
(OFPP) Act (41 U.S.C. 435), as amended.

    This memorandum sets forth the benchmark compensation amount as 
required by Section 39 of the Office of Federal Procurement Policy 
(OFPP) Act (41 U.S.C. 435), as amended. Under Section 39, the benchmark 
compensation amount is the median amount of the compensation provided 
for all senior executives of benchmark corporations for the most recent 
year for which data is available. The benchmark compensation amount 
established by Section 39 limits the allowability of compensation costs 
under government contracts. The benchmark compensation amount does not 
limit the compensation that an executive may otherwise receive. This 
amount is based on data from commercially available surveys of 
executive compensation that analyze the relevant data made available by 
the Securities and Exchange Commission. More specifically, as required 
by Section 39 of the OFPP Act, the data used is the median (50th 
percentile) amount of compensation accrued over a recent 12 month 
period for the top five highest paid executives of public-traded 
companies with annual sales over $50 million. After consultation with 
the Director of the Defense Contract Audit Agency, we have determined 
pursuant to the requirements of Section 39 that the benchmark 
compensation amount for contractors' Fiscal Year 2006 is $546,689. This 
amount is for Fiscal Year 2006 and subsequent contractor fiscal years, 
unless and until revised by OMB. The benchmark compensation amount 
applies to contract costs incurred after January 1, 2006, under covered 
contracts of both the defense and civilian procurement agencies as 
specified in Section 39 of the OFPP Act (41 U.S.C. 435), as amended.
    Questions concerning this memorandum may be addressed to Julia B. 
Wise, Office of Federal Procurement Policy, on (202) 395-7561.

 [FR Doc. E6-6629 Filed 5-2-06; 8:45 am]

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