Senate Panel Approves Cap on Contractor Pay

June 6, 2012

Defense contractors could charge the government no more than the vice president earns — currently $230,700 — to pay most of their employees' salaries, under a provision in the Defense authorization bill approved Tuesday by the Senate Armed Services Committee.

The current cap — $763,029 — applies to defense contractor employees' wages, salary, bonuses and deferred compensation.

The current cap is based on the median compensation of senior executives in large U.S. corporations. At nonDefense agencies, the current cap applies only to a contractor's top five executives; other employees working for those contractors can earn more. 

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