The pay czar, Kenneth Feinberg, is tough man. He has forced firms that have taken TARP money to sharply drop the base salaries of their senior managers. Executives will have to take more of their compensation in stock and these grants will be based on performance.
Feinberg has been so adamant about keeping compensation down that he apparently pushed the CEO of AIG (NYSE:AIG) to the point where he threatened to resign. AIG cannot keep its top talent of it cannot pay a competitive wage, or so the story goes. Even the chairman of GM and the board of Bank of America (NYSE:BAC) have said pay caps may keep them from getting the best talent on the market.
Feinberg blinked, a little. Yesterday he said that if he saw a huge drain of talent from the Wall St. firms he oversees that he would reconsider his pay philosophy. He added that he was witnessing nothing of the sort. “If I saw some mass exodus, which I do not anticipate, that would require me to rethink some of the basic assumptions that have entered into my determinations,” Feinberg told Reuters.
Douglas A. McIntyre
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