Kenneth Feinberg, whose job is to police compensation of CEOs in companies that received help under the Troubled Asset Relief Program (popularly called the 'pay czar’), is worried that pay restrictions he ordered at bailed-out companies will affect their competitiveness. He defended his move to curb excessive pay: “I’m always concerned that the companies thrive and they keep the personnel they need to stay in business”. Feinberg also added he would love to see other companies adopt compensation plans based on their long-term profits.
One month ago, the pay and bonuses for the top 25 earners at the seven biggest bailed-out firms were reduced by 50%. Now Feinberg has mentioned that he might allow firms to hire new executives at competitive pay.
The success of the pay levels for the bailed-out firms will be measured by their repayment of taxpayer money: it's of the utmost importance that these companies are kept in business, in order that the U.S. taxpayer will get repaid.
Bernard Matthys
Reuters
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