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October 28th, 2009
Published in Knowledge@Wharton October 28, 2009
Last week, the Obama administration’s “pay czar,” Kenneth Feinberg, announced that the government will impose caps on compensation for the 25 highest-paid executives at seven companies that received “exceptional assistance” through the Troubled Asset Relief Program — including American International Group (AIG), Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and GMAC. Under the new regulations, salaries will be reduced by an average of 90%, and total compensation (including bonuses and stock options) will be lowered by 50%. Knowledge@Wharton spoke with Wharton accounting professor Wayne R. Guay and then with finance professor Alex Edmans about what these changes could mean for Wall Street, company shareholders and taxpayers.
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Tags: Compensation Trends, pay czar
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October 27th, 2009
Published in CNN Money October 27, 2009, by Jennifer Liberto
The next round of executive pay decisions for companies that have received substantial government bailout funds could have a more lasting impact on pay practices nationwide, the special master on pay for the bailout said Tuesday.
Kenneth Feinberg, the so-called pay czar of the Troubled Asset Relief Program (TARP), last week imposed caps on those who hold the top 25 positions at seven companies in which the government has a substantial stake, including AIG (AIG, Fortune 500), Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500). He also demanded that each of the bailed-out companies reduce compensation for the 25 highest-paid employees by an average 50%.
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Tags: Compensation Trends, pay czar
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October 23rd, 2009
Published in Investment News October 23, 2009by Sara Hansard
Large brokerage firms that are part of bank holding companies could be forced to review their compensation arrangements for brokers and advisers as a result of a new pay proposal introduced Thursday by the Federal Reserve Board.
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Tags: Compensation Trends, financial services industry, pay czar
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October 23rd, 2009
Published on CNBC October 23, 2009 by Reuters
Outrage over the lavish compensation that Wall Street has awarded itself for doing a crummy job is likely to increase the focus and burdens on the people who set and monitor how pay is doled out: corporate directors.
The financial crisis has prompted demands by shareholders and politicians to rein in out-of-control pay, especially when it spurs bankers and traders to take too much risk.
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Tags: bonuses, Executive compensation, pay czar, Wall Street
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October 22nd, 2009
Published in Bloomberg October 22, 2009 by Julianna Goldman, Ian Katz and Robert Schmidt
The Obama administration slammed Wall Street by ordering pay cuts by an average of 50 percent and caps on benefits for top executives at companies owing the government billions of dollars from taxpayer-funded bailouts.
The news triggered debate about the government’s reach into private industry, whether pay reductions would spread to other companies and if a talent drain from U.S. firms would ensue. Others cheered the move.
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Tags: Executive compensation, pay czar, Wall Street
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October 21st, 2009
Published in The Wall Street Journal October 21, 2009 by Deborah Solomon
The U.S. pay czar will slash compensation for the 25 highest-paid employees at seven firms receiving large sums of government aid and demand a host of corporate-governance changes at those firms, according to people familiar with the matter.
Kenneth Feinberg, the Treasury Department’s special master for compensation, will lower total compensation for 175 employees by an average of 50%, these people said. As expected, the biggest cut will be to salaries, which will drop 90% on average.
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Tags: Executive compensation, pay czar
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October 20th, 2009
Published in CNN Money October 20, 2009 by David Ellis
President Obama’s “pay czar” will soon decide whether top executives at firms that received the most assistance from the government during last year’s financial crisis are making too much money.
By month’s end, Kenneth Feinberg, a Washington attorney who up until six months ago was known by few on Wall Street, is expected to rule on pay packages for the 5 most senior executives at Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500) and AIG (AIG, Fortune 500) as well as 20 other highly compensated executives at those firms.
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Tags: Executive compensation, pay czar, Wall Street
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October 16th, 2009
Published in The Wall Street Journal October 16, 2009 by Deborah Solomon and Dan Fitzpatrick
The Treasury Department’s pay czar pushed outgoing Bank of America Corp. Chief Executive Kenneth D. Lewis into giving back about $1 million he received so far this year and forgoing the rest of his $1.5 million salary for 2009, say people familiar with the matter.
The move makes Mr. Lewis the biggest target so far of Kenneth Feinberg, the Treasury’s “special master” for compensation. He also asked that Mr. Lewis pass up any 2009 bonus from the Charlotte, N.C., bank.
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October 14th, 2009
Published in The Wall Street Journal October 14, 2009 by Deborah Solomon, Michael R. Crittenden, and Liam Pleven
The U.S. pay czar is clashing with American International Group Inc. over $243 million in retention bonuses, potentially sparking a showdown over the insurer’s compensation practices.
Kenneth Feinberg, the Treasury Department’s special master for compensation, has told AIG it should reduce $198 million in promised payments for 2010 and recoup $45 million already paid in 2009. The demands were made public in a report from Neil Barofsky, the special inspector general overseeing the government’s bailout.
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Tags: bonuses, Executive compensation, pay czar
Expert Perspective
by Edie Kingston
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October 12th, 2009
Expert Perspective by Grahall’s OmniMedia Editorial Board
Reuter’s journalist Steve Eder wrote in his September 25, 2009 article “U.S. ‘pay czar’ Feinberg using formulas, not caps” that “President Barack Obama’s ‘pay czar’ said on Friday he was using formulas and data analysis to determine executive compensation rather than relying on pay caps.” We expect that this came as a great relief to many executives in the TARP companies.
Continue reading “The Secret Formula” »
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Tags: Executive pay formulas, pay czar
