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US pPay czar: No need to take on more authority

US pPay czar: No need to take on more authority

The Obama administration's "pay czar" who reduced pay for executives at seven major corporations does not want broader powers over the rest of the U.S. financial sector.
"I'm perfectly comfortable, thank you, limited to these seven companies," Kenneth Feinberg told a congressional committee Wednesday.
But Feinberg, who ordered cutting top executive compensation at the seven companies in half, told lawmakers that the standards he used should guide the broader marketplace.
"I'm hoping that the report that I issued and the recommendations that I made as to these seven companies will have some effect, voluntarily, in influencing how the private sector goes about establishing compensation practices," he said.
His testimony comes as Congress continues to struggle with what role government should play in determining top executive pay at companies that are so large and intertwined that their failure can ripple throughout the economy.
The House earlier this year voted to tie compensation to performance in hopes of reducing risky behavior. The limits would apply to any financial firm with more than $1 billion in assets. The Senate has yet to act on pay regulations.
Feinberg set pay for the top 25 executives at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial _ all seven received billions of dollars in government bailouts.
He told the House Committee on Oversight and Government Reform that he rejected compensation plans by six of the seven companies because they were contrary to the public interest. That the companies submitted such proposals, he acknowledged, indicated a lack of understanding over the public outrage over high pay at bailed out firms.
"I found that the submissions did not adequately address the major concerns expressed by the American people," he said. Feinberg said Chrysler Financial had unique circumstances that justified their pay plan.
Feinberg became pay czar earlier this year as Congress was responding to outrage about huge bonuses being paid to AIG. Lawmakers wanted to curb executive compensation at companies getting exceptional assistance. Feinberg has been reviewing compensation packages since August.
Feinberg said that in some instances the monthly salary received by executives at the seven companies increased. But he disputed a Wall Street Journal report Wednesday, saying he dramatically cut the overall cash payments to those executives.


Updated : 2021-05-13 09:22 GMT+08:00