US pay czar Kenneth Feinberg has announced that a number of the highest-paid executives at bailed out companies will have their remuneration cut by an average of 15 percent this year.
Cash salaries will be set at $500,000 or less for 82 percent of the executives named in the ruling which takes in the top 25 highest paid staffer at each TARP company.
The majority of executive compensation will be paid in stock that must be held for the long term, and incentives that are only paid if objective performance goals are met.
Feinberg also is requesting information on executive pay exceeding $500,000 at more than 400 companies that received bailout funds in 2009. He hopes to identify “whether any payments were contrary to the public interest” and possibly seek reimbursements. Companies will have 30 days to respond.
The move to revisit the pay deals may have taken some observers by surprise. However it looks as if Feinberg is taking advantage of the relative stability in the workforce at the TARP beneficiaries. Contrary to initial predictions that the companies would lose talented staff, according to a Reuters report, the US Treasury, where Feinberg’s office is based has said that 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.”