Former Pay Czar Explains Executive Compensation Process

By Kyle LaFleur- Talk Radio News Service

During an appearance Thursday before the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP), former pay czar Kenneth Feinberg explained that compensation for executives at bailed out companies was based on individual executives’ abilities to avoid unnecessary risks and keep their companies competitive enough to repay TARP obligation

“When making compensation determinations, these principles demanded that I strike a balance between prohibiting excessive compensation and permitting the appropriate competitive compensation to attract talented executives capable of maximizing shareholder value,” Feinberg said in a submitted statement. 

Feinberg, whose tenure as special master for TARP executive compensation lasted from June 2009 to September of this year, was responsible for setting compensation for the “top 25” executives at seven companies including Bank of America, AIG and General Motors. 

“No one can argue against the ‘public interest,’ but in the context of executive pay, it is very difficult to define or measure,” said Congressional Oversight Panel Chairman Sen. Ted Kaufman (D-Del.)

According to Feinberg, by following the principles, Bank of America, Citigroup and Chrysler Financial are already out of the jurisdiction of the special master. Citigroup will still fall under the rules of TARP until it repays its obligation.