Pay Czar Slashes Compensation; Makes Governance Changes

Posted by: Jena McGregor on October 21, 2009

In a striking display of government authority, pay czar Kenneth Feinberg is taking a knife to the pay packages of certain companies receiving U.S. funds. According to media reports, the government will slash the compensation of the 25 highest-paid employees at the seven firms receiving the most aid.

The biggest drop will be to salaries, which will plummet 90% on average for these firms, while total compensation will fall by an average of about 50%. (Those numbers could be skewed by agreements reached with executives like outgoing Bank of America CEO Kenneth D. Lewis, who is forgoing all of his 2009 salary.) The reports also say that no top executive at AIG’s financial products unit, which bore the blame of the insurer’s near-collapse last year, will make more than $200,000. And any perks packages that total more than $25,000 at these firms will have to be approved by Feinberg.

While the numbers may be most startling, what’s also notable in Feinberg’s moves are the corporate governance changes reportedly being demanded at these troubled firms. The positions of Chairman and CEO will be split, boards will have to create risk assessment committees, and “staggered” director elections will be eliminated. In boards that have such elections, not every director comes up for vote each year, making it harder for shareholders to make their voice heard on the performance of individual directors.

While the pay cuts are sure to get the most attention, especially following months of public furor over Wall Street bonuses, the governance moves matter, too. Far too little focus has been placed on directors’ role in the crisis, and what their oversight might have done to prevent it. Names like Andrew Hall, Citigroup’s $100 million man, may have become overnight fodder for water cooler chatter, but how many people angry over executive compensation levels can name members of Citigroup’s pay committee?

It’s unclear whether these governance changes will have much impact—several of these bailed out firms already have separate chairman and CEO posts, for instance—but they at least strike at the heart of the matter. It is directors, after all, who have been responsible for setting pay for executives. By slashing pay as deeply as he is, Feinberg is saying, in a sense, that he doesn’t trust boards to make those decisions. Still, perhaps the moves now being put into effect could help shareholders trust them a little more.

Reader Comments

honestly_now

October 21, 2009 6:49 PM

Finally!!!!!!!!!!!!!!
The disparity between top and bottom levels of compensation are absoultely obscene. These Executives have virtually nothing at risk the way their packages are structured. What is the difference in lifestyle between ONLY making $10 million a year and $30 million. Oh, sorry I caused the company to lose $5 billion, please hand me my golden parachute, time to bail before the company implodes.......

dirk

October 21, 2009 6:51 PM

a pay czar? hmmm i wonder how much of our tax dollars he gets paid?

Realist

October 21, 2009 6:52 PM

Hallelujah! It’s about time.

john

October 21, 2009 6:52 PM

anybody cutting Jamie Dimons pay?

$30 billion Bear Stearns
+25 Billion TRAP loan
+$4.22 maiden lane

= $59 Billion dollars.

is anybody going to cut Jamie Dimon, the liar, pay?

Strategery

October 21, 2009 6:55 PM

GOOD!

roncee

October 21, 2009 6:57 PM

I'm not one to advocate government intrusion into corporate matters, but hey, you people took the taxpayer's money to bail you out of a situation that was caused through your own negligence or outright malfeasance. I think it is appropriate to limit the compensation of the corporate officers of any company that has had it's hand out begging the taxpayer for funds to keep it afloat. If I was king, I would can every CEO and CFO of these companies that had to be bailed out by the taxpayer. That said, I would take back the last two years of salary and bonuses of these clowns too; they sure didn't earn it!

gil.g

October 21, 2009 6:57 PM

They created the monster make them pay for it..Tired of funding them with our hard earned money and seeing the same result every time.

kornbread

October 21, 2009 6:58 PM

Top pay attracts the best people for leadership positions. I will agree that many mistakes where made,but we must look at replacing those who made the mistakes and try to attract better people for these leadership roles.Cutting their pay will not improve performanceby any means.I think if these cuts are made many will face hardship regardless if they make millions,remember we spend what we make!

David

October 21, 2009 6:59 PM

Absolute garbage. Not that I am one of them, or make anywhere near $200k. If someone negotiates a high salary and bonus structure, that person has every right to receive it.

Talk about divide and conquer. The President is just looking to point fingers and show that he's punishing 'that other guy'. What he is doing is not only illegal, but unconstitutional. No part of the bailout legislation had provisions for pay review.

These pay arrangements were negotiated long ago, in good faith, and legally. For the government to now try to take those funds back from the employees, is a violation of both the 'due process' clause, as well as the 'epso facto' clause of the constitution. Time for the federal courts to put the president and his czars in their place. They don't have the authority to do what they this.

Joe

October 21, 2009 7:01 PM

If this story does not scare the living daylights out of you, you must be dead. I hope you folks that voted in this sorry administration are happy. The next salaries to be controlled by our soon to be socialist federal government may be yours. Then, maybe you'll become frightened for the future of this once great nation. Maybe this profound poem from a German pastor during Hilter's reign is in order when considering this article:

"First they came for the communists, and I did not speak out—because I was not a communist;
Then they came for the socialists, and I did not speak out—because I was not a socialist;
Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist;
Then they came for the Jews, and I did not speak out—because I was not a Jew;
Then they came for me—and there was no one left to speak out for me."

So, for all you folks that are not Wall Street types that thinks this kind of government intervention is great (under the principle of class envy), you may be next!

Ksamstaff

October 21, 2009 7:01 PM

Veddy Goot vork Comrade Feinberg! Please instruct them to also wear gray tunics and carry the Red Chairman Mao book to all functions....

roncee

October 21, 2009 7:02 PM

I'm not one to advocate government intrusion into corporate matters, but hey, you people took the taxpayer's money to bail you out of a situation that was caused through your own negligence or outright malfeasance. I think it is appropriate to limit the compensation of the corporate officers of any company that has had it's hand out begging the taxpayer for funds to keep it afloat. If I was king, I would can every CEO and CFO of these companies that had to be bailed out by the taxpayer. That said, I would take back the last two years of salary and bonuses from these clowns too; they sure didn't earn it!

lululbelle1956

October 21, 2009 7:07 PM

Hooray! Finally imposing fiscal and budgetary responsibility on these hoarders--it is about time! Clearly, shareholders have, at best, only an indirect say in these compensation packages and their votes are really meaningless in light of the majority and larger holders of shares in the company who actually run it. Once they took the taxpayer money, the government rightly stepped in to ensure it gets its return of its investment with interest. This country cannot survive on the "trickle down" theory which is clearly debunked and a merit system is absolutely needed. Haven't seen any merit in the people receiving these huge compensation packages for years now. Hooray!

Joe

October 21, 2009 7:09 PM

If this doesn't scare the living daylights out of you people, then you are all dead or terminally stupid! Whose salaries will be next? Maybe even yours. Then it will all start hitting home as to the consequences of this nations' election choices last November. We are on a very dangerous slippery slope to socialism, and I know many of you self absorbed people think this is a great thing ... until it impacts you directly. Maybe this famous poem written by a German pastor summarizing the apathy of many Germans may hit home to you:

"First they came for the communists, and I did not speak out—because I was not a communist;
Then they came for the socialists, and I did not speak out—because I was not a socialist;
Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist;
Then they came for the Jews, and I did not speak out—because I was not a Jew;
Then they came for me—and there was no one left to speak out for me."

Use you heads people!

bob

October 21, 2009 7:10 PM

If you missed it last night, PBS did a great job on the Financial Meltdown and where it began. The Warning, PBG.ORG.Frontline...Where is JP and GS on this list? They got bailed out also.
TARP, VIA AIG. This is a nice beginning but it should apply to all....

Really?

October 21, 2009 7:15 PM

If you think you can do a better job for less money go right ahead and apply for the position. Just remember that you'll be taking the reins of a struggling firm, be hated by the world if it tanks despite your best efforts, and possibly never be able to get another job as long as you live because of the risk you took.

Companies don't just give away money because they feel like it. Governments do, but not for-profit businesses. They pay those salaries and bonuses because they can't hire such talent cheaper.

Now with mandatory pay cuts those people will just move to better paying jobs elsewhere, leaving incompetents who can't draw that much behind to run the company into the ground -- prompting more calls for more government meddling.

James Handsfield

October 21, 2009 7:16 PM

Dirk -

Between $143,500 and $196,700. That's the federal Executive Pay Scale.

PROS

October 21, 2009 7:21 PM

Big Deal. The thieves have already wrecked the economy. Anything they get now is just frosting on the cake. They got away with it, pure and simple. The conversation should be directed at making them disgorge those obscene amounts. Either return the money or spend serious time in prison for failure of fiduciary duty.

Carl

October 21, 2009 7:26 PM

Thank God. Finally someone with some guts.

Captain M

October 21, 2009 7:31 PM

Life is not fair.

My company went through public bankruptcy.
I lost 19 years worth of pension and took a 48% pay cut.

Now they brag about being the world's
LARGEST AIRLINE.

Perhaps these bankers should have experienced the thrill we mortals have enjoyed!

Alston

October 21, 2009 7:37 PM

I have never seen our country in worse condition. The President needs to take a pay cut also. Why is he any better?

Worried

October 21, 2009 7:41 PM

Just where does this Csar get the power to do any of this in the absence of law and in violation of the Constitution? The govmt wants to tax our health insurance plans because our unions negotiated a good deal for the employees. Will the next step be making a maximum wage instead of a minimum wage? All of this power over the powerless people makes me very nervous.

avgjoe

October 21, 2009 7:42 PM

I don't see a problem here. These execs chose to give up there positions of power and autonomy by selling large pieces of their companies to a white knight - the tax payers represented by our elected officials. As new owners we have every right to adjust the pay of non performing employees.

Rob Quinn

October 21, 2009 7:46 PM

The government stole our money and used it to purchase control of big banks.

Big government already had indirect control of banks through the Fed, Fannie&Freddie, and policies such as "Too Big To Fail" - all of which led to the economic collapse.

Now it is no longer indirect. Washington now directly controls banks.

Tim

October 21, 2009 7:47 PM

To everyone making a socialist/communist post...If the government was really interested in taking over business, why on earth would it take over FAILING COMPANIES. If the government really were going to take over wouldn't it step in at a successful company? I'm sure someone will say something along the lines of "thats how they are going to sneak in", please! They sneak in by publicly throwing billions of dollars at companies that are hemorrhaging money?

ya sure

Rob

October 21, 2009 7:48 PM

It's unfortunate that this has to be done but what else is the administration going to do? Let them keep shoving it up taxpayer rear ends? We wouldn't be in this situation if the banks weren't allowed free unregulated reign over the previous 10 years of Republican governance or lack thereof.

M Smith

October 21, 2009 7:49 PM

Where is Goldman Sachs and other wall street firms on this list. This is nothing more than public relations play. The govt should windfall tax all compensation to EVERY employee at any firm that took 1 dollar of government money (regardless of whether they paid it back). By putting a special tax on, everyone can get paid (and it doesn't sit in the company waiting to be distributed in a future year) and be rocked with a super high tax. I would advocate a scaling tax such that every employee to get everyones pay to 200k after tax. That would fix them and teach them going forward.

jack

October 21, 2009 7:50 PM

There are good and bad things about both socialism and capitalism. It is not a binary world. If we want to be pragmatic we have to use both the carrot and the stick approach. There is nothing wrong with making a health living but sometimes the accumulation of wealth can turn into a pathology that not only does not have any substantive gains for the individual but may also harm both that person and the interconnected world that the person lives in. In the words of the great philosopher, Aristotle, in a healthy soceity, the difference between the haves and the have nots should not be more than five times.

John Morrison

October 21, 2009 7:51 PM

No one, I mean NO ONE, deserves or needs a compensation package of MILLIONS of dollars!. I don't care that it was "negotiated", I don't care if I could/could not do better for less. It does not matter. That type of compensation is Obscene!

Remember what happened in France in the late 1700's.

jbm

Rob

October 21, 2009 7:51 PM

Really? These bozos were competent? Really? And to all the "alleged" free market types... if you don't want the government meddling in your business don't ask them for money. Pretty simple!

Ed

October 21, 2009 7:52 PM

Does anyone think the people that
we've elected had anything to do with
the economy collapsing ??
Easy mortgages and loans dictated by
the congress, both republican and
Democrat, that didn't have anything
to do with our problems ?
Now those people are dictating the
repair.

Rip Van Winkle

October 21, 2009 7:52 PM

When in the hell did this country vote than everything would be run by "Czars"? A CZAR is not an American political figure by history. Why not "King Bush" or "King Obama" --or an appointed Duma over the political party delegates? Because that is not our system, that's why. We aren't Russian, or Swiss, regardless of where the rich are hiding billions of embezzled American money. Czars were extravagant failed rulers --overthrown, destroyed, assassinated, executed -- why on earth would any intelligent American, or anyone elected to our system, need to use such a negative term as "Czar"??? Our system was equipped with checks and balances that nullify the need for a "Czar" approach to policy. Makes me wonder when the "American Holocaust" begins. I'm sure there'll be a great "Czar" who was appointed to oversee it.

The Commish

October 21, 2009 7:52 PM

Hmmm, Wonder if the NFL, NBA and MLB will be next? Obviously they are all overpaid, especially the loosing teams. How can LOOSERS be paid soooo much?

Amazing that most people in our country don't understand that business skill, talent and dedication is no different than the same attributes in sports. The very best are in high demand and will move to the best opportunities.

PS - All criminals should be prosecuted whether they organize dog fights, or commit white collar crimes. Unfortunately, criminals come from all walks of life.

Aaron Selzer

October 21, 2009 7:55 PM

Bring in some young new talent; people who are happy to make 200k per. In my opinion they will probably do a better job. As things are now, the only people who end up as executives at the finance and Wall Street companies are people who are skilled at personal power struggles and who only care about lining their own pockets. History has shown beyond a doubt that the current corporate leadership in these companies follow single directive: privatize profits and socialize losses. It's business as usual to take on huge risks in the hope of making a personal killing, but at taxpayer expense if the gamble blows up.

rabridevi

October 21, 2009 7:55 PM

They should be publicly punished and their salaries and insurance be distributed to every American as part of stimulus

Not so Merry

October 21, 2009 7:57 PM

I'd like to see them take this knife to the government salaries and bonuses/extras. It seems hypocritical that they're coming down on these companies/executives and their wasteful spending without turning a discerning eye upon themselves.

Steve

October 21, 2009 7:57 PM

I'm no fan of overpaid Execs but how did the banks get to where they needed a Bailout. Let's see, Carter forces banks to provide mortgages to people who had no hope of paying for them then subsequent Democratic Communists (think 'double dippin Clinton) ratcheted up the laws and finally the banks were squeezed by these United States to the point where they are today............this is the plain truth people.......wake up!!!!!

Walla Walla

October 21, 2009 7:57 PM

The government needs to stay out of this. Big government ruins everything!

Joe Licari

October 21, 2009 7:57 PM

Executive pay should be based on a moderate base salary plus a regulated percentage of TAXABLE INCOME. Plus tax credits for adding jobs and a longevity formula which would lower employee turnover and keep the non-excutives from getting shafted.

Matt

October 21, 2009 7:59 PM

Quote: "They pay those salaries and bonuses because they can't hire such talent cheaper."

Would you be referring to the "talent" that drove these companies into the ground and nearly made them go bankrupt? The reality is that 30 million dollar salaries do more to attract charlatans that pretend they know what they are doing, than people who are genuinely qualified for the job. It encourages people to lie, cheat, and deceive others in order to make it seem like they are performing well. In reality, most of these people are completely inept and incapable. If compensation were to come down to a reasonable level, perhaps people who have genuine talent would get these jobs, instead of a bunch of actors motivated by greed.

saintjock

October 21, 2009 7:59 PM

This is insane! The government does not have the authority to do such a thing. They might aswell tell us which church to attend!

Steve

October 21, 2009 7:59 PM

Govt forces Banks into bad loans, Banks now need money. Why is this a surprise to anyone. Was it the Republicans who did this to the banks? Guess Again.

truthisgold.com

October 21, 2009 8:00 PM

Government's role is to be fair. All of these individual were crooks, but it was allowed. They should just raise taxes on compensation on individuals making over $250,000 until we are out of debt. We need to restore taxes to their historic norm on high income individuals and companies at the least.

Chuck

October 21, 2009 8:00 PM

...yet nobody complains about pensions of elected officials, as well as pensions for your local, state, and federal employees. If execs are so evil, what does that make your senators and congress people??? They retire with full benefits, do you? They are also the ones responsible for shipping your jobs overseas and you made that happen. YOU elected them, and YOU finance them.

Chuck

October 21, 2009 8:00 PM

...yet nobody complains about pensions of elected officials, as well as pensions for your local, state, and federal employees. If execs are so evil, what does that make your senators and congress people??? They retire with full benefits, do you? They are also the ones responsible for shipping your jobs overseas and you made that happen. YOU elected them, and YOU finance them.

plllr

October 21, 2009 8:01 PM

i don't remember voting for or electing any czar's. is obama setting up his own regime? what about the legislature that was in place before he was president. can he restructure our government by just deciding now we will be ruled by his czar's?

Brenda

October 21, 2009 8:01 PM

Has Kenneth Feinberg been confirmed by congress? Who has authorized him to take any action at all??

A 'czar' is to be an advisor ONLY. As soon as they begin taking actions, that role is more of a Secretary post - which would require the scrutiny and confirmation of our US Congress.

This Obama administration seems to have forgotten about a little thing called the US Constitution!!

Tom

October 21, 2009 8:02 PM

Hey Joe - No I'm not dead, but I sure am happy! This is a promising step in the right direction - social and economic inequality in this country is killing it - I'm not interested in protecting the indulgences (notice I didn't say rights) of the rich; however I do believe in the right to a living wage for all Americans, and that means downsizing CEOs and upsizing the common man (no net loss to the company).

Jaeger

October 21, 2009 8:03 PM

Joe said, "If this doesn't scare the living daylights out of you...." And I agree. I don't care if those corporations received money from the taxpayers, through the Washington D.C. governmental bureaucrats, or not, the federal government has no constitutional authority to tell a publicly held company how to conduct it's business. Thanks Bob for highlighting the PBS Frontline program about the financial meltdown that America is enjoying today, thanks to the policies of the political party in power. The whole problem can be summarized in just a few words, Sub-prime loans. Everything orbited around them and when that house of cards started to fall, the rest caved, in too. Oh, and by the way they were started during the Clinton Administration.

Lou

October 21, 2009 8:03 PM

As a corporate recruiter my next couple of weeks will be spent recruiting everyone of these executes out of these companies. They will be happy to leave and let Obama and his minions try running these companies. What a disgrace. And for all you who think this is good..then just wait till the govt starts telling you what you can eat, or drive or how much you can make...etc..The cold war was lost by the USSR but the old comrades must be rolling in their graves at the rapid spread of socialism in the US, all without firing one weapon.

Max

October 21, 2009 8:03 PM

Seems like people just don't get what this means, do they ?

Hey, given the fact that our economy is struggling and the jobless rate is rising -- when exactly is the government going to do even a %25 paycut across the board. Any guesses on how much that would help the deficit ?

Don't hold your breath... Obviously, that's not in their playbook. right ?

Steve

October 21, 2009 8:03 PM

If you don't post one of my last 2 comments BW, you are part of the problem, not the solution

Brenda

October 21, 2009 8:04 PM

Has Kenneth Feinberg been confirmed by congress? Who has authorized him to take any action at all??

A 'czar' is to be an advisor ONLY. As soon as they begin taking actions, that role is more of a Secretary post - which would require the scrutiny and confirmation of our US Congress.

This Obama administration seems to have forgotten about a little thing called the US Constitution!!

Brenda

October 21, 2009 8:04 PM

Has Kenneth Feinberg been confirmed by congress? Who has authorized him to take any action at all??

A 'czar' is to be an advisor ONLY. As soon as they begin taking actions, that role is more of a Secretary post - which would require the scrutiny and confirmation of our US Congress.

This Obama administration seems to have forgotten about a little thing called the US Constitution!!

Paul

October 21, 2009 8:05 PM

There is a very easy way for these executives to not have their pay cut by the government: PAY BACK ALL THE TAXPAYER FUNDS YOU BORROWED!

No one is forcing these banks to keep the taxpayer's money and therefore be on the hook for the government, which is now a shareholder. Hey, maybe instead of giving out huge bonuses, you could repay the taxpayers and then pay your executives whatever you want.

Russ Lynam

October 21, 2009 8:05 PM

New York received taxes on $150,000,000,000 of Wall Street money over the 10 year period prior to this debacle, that was only on the bonuses paid out, wonder what the total would be if pay and benefits were factored in?

Jeff in Vermont

October 21, 2009 8:05 PM

It's about time the greedy pigs were finally separated from the public trough. Their behavior has been shameful, to say the least. Finally some bold leadership on the part of the Obama administration! Bravo!!! We've been waiting

Brenda

October 21, 2009 8:05 PM

Has Kenneth Feinberg been confirmed by congress? Who has authorized him to take any action at all??

A 'czar' is to be an advisor ONLY. As soon as they begin taking actions, that role is more of a Secretary post - which would require the scrutiny and confirmation of our US Congress.

This Obama administration seems to have forgotten about a little thing called the US Constitution!!

Kelly

October 21, 2009 8:06 PM

Just a small sampling of the results of "Pandora's Box" being opened.

Max

October 21, 2009 8:06 PM

Seems like people just don't get what this means, do they ?

Hey, given the fact that our economy is struggling and the jobless rate is rising -- when exactly is the government going to do even a %25 paycut across the board for all government "servants" such as our Senators, Governors, etc etc. Any guesses on how much that would help the deficit ?

Don't hold your breath... Obviously, that's not in their playbook. right ?

Government determining salaries -- doesn't bother you ? Enjoy your kool-aid :)

tommyg

October 21, 2009 8:07 PM

I can't really imagine that a 'pay czar' has ANY REAL authority! They aren't elected or even cleared through the senate. While I would agree that anyone who's taking TARP funds has to 'serve it's master', I'm hard pressed to think that this can be constitutional!? TG

John

October 21, 2009 8:07 PM

Has Kenneth Feinberg been confirmed by congress? Who has authorized him to take any action at all??

A 'czar' is to be an advisor ONLY. As soon as they begin taking actions, that role is more of a Secretary post - which would require the scrutiny and confirmation of our US Congress.

This Obama administration seems to have forgotten about a little thing called the US Constitution!!

Sundara Rao

October 21, 2009 8:08 PM

Great! Now you got top seven falters.

What about the REST?? Still get fat valets?

releggneh

October 21, 2009 8:08 PM

What right does one person have to go over everyones head & decide what they are worth?? As long as these companies are paying back the money with interest what business is it to Oslama?? That would be like you taking out a loan & the bank telling you what you can spend your money on while paying them back with interest. Another csar, don't have to be voted or elected, the only person you have to answer to is Oslama!!! Let's see, he owns the banks, auto makers, unions, maybe the health insurance & our power plants. I think baby hitler just about have everything covered as far as turning us into China!!!Can we grow rice paddys in the US to feed our families and have it rationed so everyone gets an equal piece of the pie whether you work in the fields or not??

Dan

October 21, 2009 8:09 PM

Here come the Republicans and their "socialist/communist" argument along with "attracting the best people" logic. Executives make a lot less in other part of the developed world.

Joe

October 21, 2009 8:09 PM

Heh, you fools from Glenbeckistan get your analogies straight. Hitler was a facist not a socialist. Facism is a political system based on authoritarianism with strong ties to capitalist industry (Krupp, Bayer, BMW ,etc). Dick Cheney is a facist, Barack Obama is not. OK?

Tommy G

October 21, 2009 8:10 PM

I can't really imagine that a 'pay czar' has ANY REAL authority! They aren't elected or even cleared through the senate. While I would agree that anyone who's taking TARP funds has to 'serve it's master', I'm hard pressed to think that this can be constitutional!? TG

James

October 21, 2009 8:10 PM

How about cutting the pay of Kenneth Feinberg? Maybe I think he earns too much. It is NOT govenment's role to decide how much one should make - unless we are now a socialist or communist nation.

Jeff

October 21, 2009 8:12 PM

What if you're the 26th highest paid person? No pay cut? So, if everyone above you is getting cuts, then the #26 guy might ultimately make it to the top 10 or better.

That guy's one lucky fella.

Amstel

October 21, 2009 8:12 PM

"Companies don't just give away money because they feel like it. Governments do, but not for-profit businesses. They pay those salaries and bonuses because they can't hire such talent cheaper."

Isn't it obvious that the only "talent" being employed by the people targeted in this action is the talent to get into a position that decides how much is paid, then paying themselves as much as can be gotten away with, the health or future of the company be damned.

That kind of talent we can do without

Rick Martin

October 21, 2009 8:13 PM

To the person questioning why Goldman Sachs isn't on this list:
Wake up.. The government is owned by Goldman Sachs. Did you see that the new "Enforcement" position at the SEC was just awarded to yet another ex Goldman exec. This position will just be used to preferentially enforce laws against Goldman's competition to drive it out of business and/or drive the value down so it can be absorbed by Goldman on the cheap. Same that was done to Bear Stearns. Within 2 years the only companies that have survived the new, systemic tyranny and forced monopolisation will be driven out of biz our taken over by a Goldman controlled entity.

Jeff

October 21, 2009 8:13 PM

What if you're the 26th highest paid person? No pay cut? So, if everyone above you is getting cuts, then the #26 guy might ultimately make it to the top 10 or better.

That guy's one lucky fella.

releggneh

October 21, 2009 8:13 PM

What right does one person have to go over everyones head & decide what they are worth?? As long as these companies are paying back the money with interest what business is it to Oslama?? That would be like you taking out a loan & the bank telling you what you can spend your money on while paying them back with interest. Another csar, don't have to be voted or elected, the only person you have to answer to is Oslama!!! Let's see, he owns the banks, auto makers, unions, maybe the health insurance & our power plants. I think baby hitler just about have everything covered as far as turning us into China!!!Can we grow rice paddys in the US to feed our families and have it rationed so everyone gets an equal piece of the pie whether you work in the fields or not??

Dick

October 21, 2009 8:13 PM

The govt. bail-outs were only the beginning of the total take over of our free market economy. Now the marxists in the Obama White House are setting salaries and governance. Don't think for a minute that it will stop there. Believe me, brother, your pay is next on the chopping block. If Obama has his way, all your pay will be subject to review and will be redistributed to someone else.

tom madigan

October 21, 2009 8:14 PM

Welcome to F***ing Russia.

Wake up people. This is bullshit !!!
The President does not have the Constitiounal authority to do what he is doing.
We should have let these companies fail. That would have in itself caused major reform in their outlook. Yhe basis of capitolism is survival of the fittest....
Sinece when has the government shown that they know what the hell they are doing, ESPECIALLY in private business.

IMPEACH this clown you no brainers elected before it is too late.

tom madigan

October 21, 2009 8:14 PM

Welcome to F***ing Russia.

Wake up people. This is bullshit !!!
The President does not have the Constitiounal authority to do what he is doing.
We should have let these companies fail. That would have in itself caused major reform in their outlook. Yhe basis of capitolism is survival of the fittest....
Sinece when has the government shown that they know what the hell they are doing, ESPECIALLY in private business.

IMPEACH this clown you no brainers elected before it is too late.

Floyd

October 21, 2009 8:15 PM

Hope this guy gets around to looking at Congressional pay and benefits. Term limits or a substantial cut....one way or the other.

dave

October 21, 2009 8:17 PM

Go Obama! - please control profits and wages on Wall street, then control profits and wages for the rest of us -- "From each according to his ability, to each according to his need." then we can finally be equally poor.

Klaus

October 21, 2009 8:19 PM

Calm down!

Joe, As someone who has heard Martin Niemöller's poem in the original, and who has some appreciation for what it is about, your quotation of it in this context is ludicrous.

When 'they' came for the communists, and then the socialists, the trade unionists, the Jews and finally the pastor, what 'they' came for was NOT to limit the salary of these folks to $ 200,000 or even the equivalent in Reichsmark.

I gather you find these measures wrongheaded, and one could argue about that. However, to equate Kenneth Feinberg with the Nazis is way out of bounds.

This kind of hyperventilation makes a mockery of rational arguments... which is presumably what people should use their heads for.

buffalo bob

October 21, 2009 8:19 PM

Actually, Feinberg, the pay czar, is working pro bono, just as he did as the 9/11 fund executor. He's one of the good guys and has the cojones to take on Wall St.

Rick Martin

October 21, 2009 8:19 PM

To the person questioning why Goldman Sachs isn't on this list:
Wake up.. The government is owned by Goldman Sachs. Did you see that the new "Enforcement" position at the SEC was just awarded to yet another ex Goldman exec. This position will just be used to preferentially enforce laws against Goldman's competition to drive it out of business and/or drive the value down so it can be absorbed by Goldman on the cheap. Same that was done to Bear Stearns. Within 2 years the only companies that have survived the new, systemic tyranny and forced monopolisation will be driven out of biz our taken over by a Goldman controlled entity.

Spike

October 21, 2009 8:21 PM

Congressional salaries....can we address those overpaid and over-benefited non-producers? Term limits or severe reduction in pay and bennies.

eeterrific

October 21, 2009 8:21 PM

Hmmm...we have a minimum wage. Perhaps we need a maximum wage, as a multiplier of the minimum wage. Say...100 x? Of course, it would have to cover all reimbursements (no giving options, stock grants, etc). But it wouldn't cover dividends, interest payments (which would have to have a limit...). One would have to watch the games companies would want to play to increase income. I imagine dividend payouts would really go up.

I wonder what a economic modeler of such a policy would have to say?? Would there be an exodus of talent to other countries??

Rob Quinn

October 21, 2009 8:21 PM

The government stole our money through taxes and used it to purchase
control of big banks.

Big government already had indirect control of banks through the Fed,
Fannie&Freddie, and policies such as “Too Big To Fail” - all of
which led to the economic collapse.

Now the control is no longer indirect. Washington now directly
controls banks.

Washington should have let bad banks fail instead of giving them your
money and then nationalizing them.

Of course, most people don’t care Obama took their money and gave
it to the banks, they’re just upset that the banks took it and made
profits.

Apparently stealing and then giving away blood money is fine, but
legally accepting it is bad.

Thinker

October 21, 2009 8:24 PM

It's rather interesting point...
I disagree with the compensation packages at the executive level, but at the same time it's not really person filling in the shoes who demands that package. Most firms work with consulting companies that negotiate packages for executives and they create "the best" package to attract the best talent. Candidate may have a thing or two to say, but for the company it's more of a claim of fame what exec package they have.
In case with TARP, taxpayers should have to say what we are willing to accept as exec compensation. Yes, if it goes beyond TARP companies, I would strongly object the notion to regulate others salaries. I was in the system that everybody was getting paid equally and everyone was contributing equally. :-)
The saying goes " They pretend they pay and we pretend we work". At the end no one was benefiting from the system.

If if we are still loosing jobs, President Obama should turn in his Noble Price that he did not deserve and cut his salary 50% until economy improves. We paying all his expenses anyway. So, there is not need for him to have $400K in salary. He will do just fine.

Would that work?

Mikee

October 21, 2009 8:27 PM

Obama knows best. Just ask him.

Tom Fox

October 21, 2009 8:35 PM

My hope is that this catches on and hopefully the next administration which will be republican can then use this precedent to cut UNION WAGES for under worked, over compensated workers who cannot be fired no matter how incompetent they are. I can hear the argument now...."Is it any wonder our companies cannot compete when the average weekly union wage in this country is equivalent to the average annual wage in some third world country".. Hey lets get rid of all the dead wood...Obama wants class warfare, then lets give him class warfare....For all those who ignorantly think Obamas populist stunt to cut exec pay is a good thing..just wait till it is pay back time.

Rob Quinn

October 21, 2009 8:52 PM

The government stole our money through taxes and used it to purchase control of big banks.

Big government already had indirect control of banks through the Fed, Fannie&Freddie, and policies such as “Too Big To Fail” - all of which led to the economic collapse.

Now the control is no longer indirect. Washington now directly controls banks.

Washington should have let bad banks fail instead of giving them your money and then nationalizing them.

Of course, most people don’t care Obama took their money and gave it to the banks, they’re just upset that the banks took it and made profits.

Apparently stealing and then giving away blood money is fine, but legally accepting it is bad.

Jaeger

October 21, 2009 8:57 PM

Joe, what part of National Socialism, ie, NAZI, don't you understand? That is what Hitler was, a National Socialist. If Obama is a National Socialist, may Heaven help the U.S.

Jaeger

October 21, 2009 8:57 PM

Joe, what part of National Socialism, ie, NAZI, don't you understand? That is what Hitler was, a National Socialist. If Obama is a National Socialist, may Heaven help the U.S.

Roosty

October 21, 2009 9:15 PM

Absolutely unbelievable. Who would have ever thought this great country would have come to this? Let's not forget the people who are "fixing" the problem are the people who created it. Subprime loans: blame the government and community reinvestment act. Auto industry: think the impossible average fuel economy requirements (cafe) and the backing of the unions had anything to do with it? Now they're going to tell business what they can pay. Can't wait until my bank and auto company looks like the post or social security office.
The problem? Politicians are crooks and now 47% (and rising) of U.S. households don't even pay income taxes. If a politician wants to get and stay elected, he/she has to promise to give your money away to the majority, which is exactly what they do.

Rob Smith

October 21, 2009 10:58 PM

This is simply outrageous! While the CEO's responsible for this economic debacle deserve to have their salary cut this is not the way to do it.
Feinberg has absolutely no Constitutional right to do this. Even Obama doesn't. The White House does not have the legal jurisdiction to dictate what a private citizen may or may not be payed.
However, if this is unlawfully acted, then the government itself should make sure to cut the pay of every single White House official, Senator, and Congressmen by at least 25%.
It's time that these bureaucrats take responsibility for their actions and do what the American people VOTED for them to do as noted in the Constitution.

mom

October 22, 2009 11:02 AM

Goverment should not be involed in helping the banking companys.
where is our freedom.
I guess it is all down the drain.
Why even work let us sit and collect
everything from the goverment?
Just take all of our freedom away.
No one should stand for all of this.
Do I hear Hail Hitler!

GOOD GRIEF!

October 22, 2009 11:52 AM

Does this mean the CEO will now put HIS hand in HIS pocket to pay: for that $500 bottle Bordeaux? Pay the $2500 for the suite, where he entertains his mistress? How about those 12 course sumptuous banquets, they're so fond of, when the shareholders and taxpayers are footing the bill? The list is endless, just like Wall Street goons entertaining lavishly, with the taxpayer picking up the tap? The REALITY IS....these guys rake in bundles, but NEVER pay for ANY thing. Any of us tried this and the IRS Auditors would be ALL over us with ball bats!! Thank YOUR Congressman and Senator woman, for this abuse.

Brian

October 22, 2009 2:08 PM

Hooray! Now maybe these top execs will come work for my privately owned company for the millions they deserve. Screw all the US owned companies. This is not supposed to be a SOCIALIST country last I checked.

Get out of our country Feinberg!

Mike

October 23, 2009 10:29 AM

The taxpayers own AIG and the government has every right to restrict their salaries. If certain employees complain about not receiving their bonuses then they can leave. There are plenty of talented people out there willing to take their place.
Also remember billions of dollars flowed through AIG to foreign banks to pay the credit default swaps. Where is the outrage about that!

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October 24, 2009 3:43 AM

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Rich T.

October 28, 2009 7:49 PM

The only real problem here is that Feinberg's actions will not amount to much when all is said and done.

Certain corporate government measures are long overdue, and this is but a symbolic act ahead of what will be meaningful reform. The executive elite cannot forever do as it pleases with impunity, now that the rest of the country is starting to watch.

And I'm disappointed in those commenters who defend the ability of that elite to do as it pleases.

Golf

March 26, 2010 6:26 PM

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How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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