Pay czar orders 15 percent pay cut for bosses at bailed-out firms
WASHINGTON — President Barack Obama’s pay czar on Tuesday ordered executive compensation at prominent bailed-out firms to be cut by 15 percent, amid voter anger over Wall Street pay.
Kenneth Feinberg said 119 executives at AIG, Chrysler, Chrysler Financial, General Motors and its troubled former finance arm GMAC would see their cash rewards slashed by a third and their total pay cut by 15 percent versus last year.
All five firms received taxpayer money to stay afloat during the financial crisis, which continues to weigh on US economic recovery.
Feinberg also sent a letter to more than 400 firms who got government bailouts before February 2009, asking them to disclose details of the top 25 executives receiving annual pay of more than 500,000 dollars.
It marks the first time the government will look into pay at a broad swath of firms that took government bailout funds.
But the list contains some familiar names from the financial crisis including; American Express, AIG, Bank of America, Chrysler, Morgan Stanley, Citigroup, General Motors, JP Morgan Chase, the Bank of New York Mellon and Wells Fargo.
In a statement, the Treasury said Feinberg’s review would “determine whether any payment was contrary to the public interest — and, if any such payment is identified, will seek to negotiate reimbursements to the federal government.”
It is the latest in a series of pay reviews ordered by the Obama administration, which has denounced the culture of paying large executive bonuses at failing firms.
Critics say the pay limits at bailed-out firms stop them from attracting top talent.
In a statement announcing the 2010 measures, the Treasury Department — where Feinberg is based — said 84 percent of the executives included in last year’s rulings remain at their firms.