Posts Tagged ‘pay czar’

Politics as Usual

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Expert Perspective by Grahall’s OmniMedia Editorial Board

With a sad shake of our heads and an audible sigh we read the article By Jim Puzzanghera and Nathaniel Popper  Pay czar slams bonuses but doesn’t seek refund and agreed that “it’s just politics”.  Clearly our Special Pay Master, Pay Czar, or whatever you care to call him really didn’t have much influence over anything payments made by TARP companies.  The nose thumbing that makes Wall Street universally disliked by Main Street  was this time, clearly directed at Feinberg with them saying, in effect “we don’t damn about how you think we should run our companies.”  And Feinberg blinked.
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What’s a Bailed-Out Banker Really Worth?

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Published in The New York Times, January 3, 2010 by Steve Brill 

Last August, as midnight approached on a Friday, two Treasury Department staff members sat in a cramped basement office in the Treasury Building next to the White House and watched as their e-mail in-boxes filled up. The aides worked for Kenneth Feinberg, the government’s special master for executive compensation, and they were awaiting submissions from companies that had received (and not yet paid back) billions in what federal regulations call “exceptional assistance” from the government’s Troubled Asset Relief Program, or TARP. The government had the authority to set compensation levels at those seven TARP recipients, and this was the companies’ opportunity to plead for salaries and bonuses for each of its top 25 executives. Chrysler Financial and General Motors submitted their proposals — about 2,000-plus pages each — a few days before. Now, like college kids crashing a term paper, the other five — A.I.G., Bank of America, Chrysler, Citigroup and General Motors Acceptance Corporation — were frantically trying to get their pitches into Treasury’s digital in-box by the Aug. 14 deadline.

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Treasury Limits Cash Compensation at Four Firms

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Published in The Wall Street Journal, December 11, 2009 by Jessica Holzer 

Obama administration pay czar Kenneth Feinberg mandated new compensation rules Friday for about 450 employees at companies that received extraordinary government assistance during the financial crisis.
The rulings will apply to any 2009 compensation not already distributed to the 26th- to 100th-highest-paid employees at American International Group Inc., Citigroup Inc., General Motors Co. and GMAC. They also will serve as the starting point for 2010 pay guidelines at the companies under the paymaster’s jurisdiction.
“Do not underestimate the importance of the decisions I am rendering today,” Mr. Feinberg told reporters at a briefing. The new policies are “designed to send a message not only to these companies, but, we hope, to the greater corporate community,” he added.
Under the guidelines, cash salaries for 2009 have been mostly capped at $500,000 for the roughly 450 employees, though amounts above that threshold already distributed to employees can’t be recouped.

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Firms Face New Curbs on Pay

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Published in The Wall Street Journal December 10, 2009 by Deborah Solomon, Sara Schaefer, and Alistar MacDonald

Authorities on both sides of the Atlantic are moving to enact tough curbs on pay, in an indication that governments are taking increasingly aggressive steps to rein in compensation after the financial crisis.
In the U.S., the Treasury Department’s pay czar, Kenneth Feinberg, is poised to enact tougher-than-expected rules for employees at companies that received large amounts of government assistance. The U.K. on Wednesday slapped banks with a 50% tax on portions of bonuses they pay to individuals, in perhaps the most aggressive move yet by a government.
Mr. Feinberg has already capped salaries of top employees under his review. Now, according to government and company officials, he’s going after the next tier and is expected to impose $500,000 salary caps on hundreds of employees at the companies.

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Show Me the Money

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Published in New York Magazine November 27, 2009 by Gabriel Sherman

Shortly after 11:00 on the morning of November 4, Robert Benmosche, the 65-year-old Brooklyn-born CEO of the American International Group, sat across an oval conference table from Kenneth R. Feinberg, the special master for TARP executive compensation of the U.S. Treasury. Benmosche was flanked by AIG’s board of directors, which had requested that Feinberg come to the mahogany-paneled boardroom on the eighteenth floor of AIG’s Pine Street headquarters to explain himself. Light sandwiches and soda were served from a buffet in the hallway.
The mood was distinctly somber. Two weeks before, Feinberg had ruled that a dozen of AIG’s 25 highest-paid executives would have their 2009 income slashed by 91 percent and that salaries could not exceed $500,000 without “good cause.” About half of the executives on this list came from AIG Financial Products, the vilified trading division that had written the disastrous credit-default swaps that brought the civilized world to the brink and forced taxpayers to extend $182 billion (and counting) in financial support for the firm. Benmosche was deeply angry over Feinberg’s decision to limit his executives’ pay. But his traders were even angrier. Though the government had saved their company from imploding last September, they saw themselves as victims, scapegoats—and they were ready to fight back, departing en masse on March 16, 2010, the day after the contracts are due to be paid, if their demands weren’t met.

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Pay czar readies for bonus season

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http://money.cnn.com/2009/11/17/news/companies/feinberg_executive_compensation/
Pay czar readies for bonus season
Kenneth Feinberg is set to trim bonuses right before the checks are set to go out, raising concerns that top talent at seven companies will up and leave.
By David Goldman, CNNMoney.com staff writer
Last Updated: November 17, 2009: 4:23 PM ET
NEW YORK (CNNMoney.com) — It’s bonus time on Wall Street and pay czar Kenneth Feinberg is walking a thin line.
Feinberg, Treasury’s special master for executive compensation, has a mandate to determine appropriate executive pay packages for the top employees at the seven most heavily bailed out companies: AIG (AIG, Fortune 500), Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), General Motors, Chrysler, Chrysler Financial and GMAC.
After reviewing those firms’ pay packages for their top 25 executives last month, Feinberg has begun to review compensation plans for the next 75 highest-paid employees at each company. That report is due out by the end of the year, and Feinberg recently said he hopes to issue his ruling by the beginning of December — just before bonuses get doled out.

Published in CNN Money November 17, 2009 by David Goldman

It’s bonus time on Wall Street and pay czar Kenneth Feinberg is walking a thin line.

Feinberg, Treasury’s special master for executive compensation, has a mandate to determine appropriate executive pay packages for the top employees at the seven most heavily bailed out companies: AIG (AIG, Fortune 500), Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), General Motors, Chrysler, Chrysler Financial and GMAC.

After reviewing those firms’ pay packages for their top 25 executives last month, Feinberg has begun to review compensation plans for the next 75 highest-paid employees at each company. That report is due out by the end of the year, and Feinberg recently said he hopes to issue his ruling by the beginning of December — just before bonuses get doled out.

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BofA Hits Pay Snag in Its CEO Hunt

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Published in The Wall Street Journal November 14, 2009 by Dan Fitzpatrick

Bank of America Corp. directors are hitting a new hurdle as they hunt for the giant bank’s next CEO: Obama administration pay czar Kenneth Feinberg.
William Demchak, senior vice chairman at PNC Financial Services Group Inc., spurned a feeler last week from a recruiter for the Charlotte, N.C., bank, according to a person familiar with the situation. Mr. Feinberg’s required approval of the compensation package for whomever succeeds Kenneth D. Lewis was a major factor in the decision, this person said. Mr. Demchak also didn’t see the bank’s situation as fixable given the government’s heavy influence over the company.

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A.I.G. Chief’s Mission: Save Executive Pay

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Published in The New York Times November 12, 2009 by Mary Williams Walsh

The American International Group’s chief executive on Wednesday tried to calm fears that he was about to jump ship, with an open letter to employees announcing he was “totally committed to leading A.I.G. through its challenges.”
Robert Benmosche, chief executive of the insurer since August, confirmed that he was “frustrated” about how long it was taking to devise an executive compensation plan that was “fair” but did not violate the restrictions the government has placed on companies that are receiving taxpayer assistance.
Mr. Benmosche told employees he was “continuing to fight on your behalf,” and urged them “not to be distracted by speculative media stories, and to maintain your focus on the important work you are doing.”

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AIG’s Benmosche Threatens to Jump Ship

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Published in The Wall Street Journal November 11, 2009by Liam Pleven, Serena Ng, and Joann S. Lublin
Chafing Under Government Oversight, Chief Executive Tells Board He’s ‘Done’; ‘An Impossible Situation’
Robert Benmosche has told the board of American International Group Inc. that he is considering stepping down as chief executive of the government-controlled insurer, just three months after taking the job, according to people familiar with the matter.
At a board meeting last week, the strong-willed industry executive told fellow AIG directors that he was “done” but agreed to think it over after other board members reacted with shock, according to the people.

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The Pay Czar Is Unconstitutional

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Published in The Wall Street Journal October 29, 2009, by Michael W. McConnell
 
Last week’s announcement that “Pay Czar” Kenneth Feinberg slashed compensation for executives at seven large financial firms by an average of 50% stunned Wall Street, stoked the fires of populist resentment, and troubled economists. Will this government-mandated pay cut drive the most talented professionals away from these companies, endangering their recovery? Does it augur further politicization of economic decisions?

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