If you thought Wall Street was going to remain under close supervision from Washington even after it repaid TARP funds, well – think again. According to Reuters, Kenneth Feinberg, President Obama’s “pay czar”, also known as the “special master”, will not cap compensation of bailed-out corps or reveal names, when he releases the first wave of decisions within a few weeks.
“We don’t want specific names next to dollars…The rules do not call for capping pay,” Feinberg told a conference in New York.
Ken Feinberg, who was appointed in June to decide compensation packages for the highest-paid personnel at companies that received bailouts, has been reviewing with his team the appropriateness of pay packages proposed by seven companies that received billions of dollars in assistance from the U.S. Treasury: Citigroup (NYSE:C), Bank of America/Merrill (NYSE:BAC), American International Group (NYSE:AIG), Chrysler Financial, Chrysler Group LLC, General Motors Co and GMAC Inc. You would think that anyone involved in causing the economic meltdown would work incessantly to restore their companies to health and wouldn’t worry about future bonus or compensation. Apparently not.
As we have previously noted, we don’t subscribe to the notion that executive compensation is the major issue for the struggling financial institutions, nor do we subscribe to the idea that executives should be slammed over their compensation packages. If the package justifies performance, then regardless of the amount, that money is well-deserved. After all, success should be rewarded. It’s what makes capitalism a great system. What shouldn’t be rewarded however, is failure and incompetence.