Tags: US | Bailouts | Pay

Obama Pay Czar Demands Further Cuts at Bailed Out Firms

Tuesday, 23 Mar 2010 02:34 PM

The Obama administration's pay czar on Tuesday slashed pay again at five U.S. firms that still depend on a government lifeline, but boasted that the clampdowns are not sending talented workers fleeing for the exits.

Kenneth Feinberg, a Washington lawyer who was appointed last year to oversee pay at firms receiving taxpayer bailouts, cut 2010 pay for the highest-paid employees at those firms on average by 15 percent, compared to 2009. Cash pay was cut 33 percent on average, the Treasury Department said.

The firms are AIG, General Motors, GMAC, Chrysler and Chrysler Financial.

The Treasury, where Feinberg's office is housed, also said about 84 percent of the top earners under the pay czar's jurisdiction are still with their firms despite having their pay dramatically cut back.

"People at these five companies are not leaving the companies to go elsewhere," Feinberg told a news briefing. "There is a striking number of holdovers."

Treasury touted that statistic as evidence that Feinberg is striking the delicate balance at trying to soothe public anger over high paychecks underwritten by the taxpayer, while also trying to keep key talent at these firms.

Feinberg is in charge of setting the pay packages for the 25 top earners at five firms that received "exceptional assistance" from the government's $700 billion Troubled Asset Relief Program (TARP) and have not yet substantially repaid the funds.

© 2015 Thomson/Reuters. All rights reserved.

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