Wednesday
Oct282009
Pay Czar Lists Recommendations He's Made For Executive Compensation Limits
Wednesday, October 28, 2009 at 5:43PM
By Laura Smith - University of New Mexico/Talk Radio News Service
Treasury Official Kenneth Feinberg testified on Wednesday before the House Oversight and Government Reform Committee about his review of the bonuses paid to executives at the seven largest TARP recipients.
According to Feinberg, the Special Master for Executive Compensation under the Troubled Asset Relief Program - also referred to by some as the White House's 'Pay Czar' - those recipients include American International Group (AIG), Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and GMAC.
“For the last five months, I have a narrow mandate under the law, and that was to determine pay compensation packages for the top 25 officials in just seven companies that receive the most TARP assistance,” he said.
Feinberg explained that he received proposals from each of the seven companies on the matter of compensation, and after he reviewed them, he took specific actions to correct their flaws.
“I requested and received comprehensive submissions from each of the seven companies, explaining their view on what they thought they needed for their top 25 officials in the way of a comprehensive package. I examined those submissions with the utmost care and scrutiny, and I concluded that six of the seven submissions...were contrary to the statute, contrary to the regulations, and contrary to the public interest,” he said.
Feinberg clarified his remarks by stating that certain of the companies “wanted too much cash guaranteed salary...and made no mention of the perks that were part of their salary.”
Feinberg said that his office evaluated the submissions and made some material changes.
“First we greatly reduced the amount of cash that would be available to the senior officials. Second, they required that when they issue stock, that stock may not be cashed out for up to four years. Third, we said no more unlimited perks. Perks are limited to $25,000 per individual, and anymore than that would have to be approved by the Office of the Special Master,” he said.
Treasury Official Kenneth Feinberg testified on Wednesday before the House Oversight and Government Reform Committee about his review of the bonuses paid to executives at the seven largest TARP recipients.
According to Feinberg, the Special Master for Executive Compensation under the Troubled Asset Relief Program - also referred to by some as the White House's 'Pay Czar' - those recipients include American International Group (AIG), Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and GMAC.
“For the last five months, I have a narrow mandate under the law, and that was to determine pay compensation packages for the top 25 officials in just seven companies that receive the most TARP assistance,” he said.
Feinberg explained that he received proposals from each of the seven companies on the matter of compensation, and after he reviewed them, he took specific actions to correct their flaws.
“I requested and received comprehensive submissions from each of the seven companies, explaining their view on what they thought they needed for their top 25 officials in the way of a comprehensive package. I examined those submissions with the utmost care and scrutiny, and I concluded that six of the seven submissions...were contrary to the statute, contrary to the regulations, and contrary to the public interest,” he said.
Feinberg clarified his remarks by stating that certain of the companies “wanted too much cash guaranteed salary...and made no mention of the perks that were part of their salary.”
Feinberg said that his office evaluated the submissions and made some material changes.
“First we greatly reduced the amount of cash that would be available to the senior officials. Second, they required that when they issue stock, that stock may not be cashed out for up to four years. Third, we said no more unlimited perks. Perks are limited to $25,000 per individual, and anymore than that would have to be approved by the Office of the Special Master,” he said.
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