The pay czar for the Obama administration announced he would be cutting top executive compensation an average of 15 percent at American International Group Inc., Chrysler, General Motors Co., and an additional two firms that benefited from federal bailouts and have not yet reimbursed the government.
Guaranteed cash salaries and bonuses for the 25 top executives at the corporations listed above were slashed even more dramatically, averaging 33 percent lower than last year's levels.
Collectively 82 percent of the executives at the five firms are earning salaries below $500,000.
Under statute, Kenneth Feinberg has the authority to determine the salaries of the five senior executives as well as the next wrung of top earning employees, all the way until the 20th in line.
Feinberg has exercised such powers prior to this, cutting the salaries of executives at Citigroup and Bank of America. Since that time, the firms have repaid TARP money and are no longer subject to Feinberg’s pay regulations.
Despite this, Feinberg still has the authority to demand earnings details from any and all TARP recipients. All 419 companies that received TARP money will have their filed reviewed to insure salaries and bonuses did not exceed an amount cooperative with public interest.
Feinberg told reporters his power, despite how it may seem, is limited. "If we find there is a compensation decision inconsistent with the public interest, I cannot then file a lawsuit, can't subpoena records, can't demand an investigation," he said "All I have at my disposable under the law is the bully pulpit."
Among the companies likely to receive said bullying is AIG. AIG has been condemned for the outsized bonuses paid to employees in Financial Products, one of the companies riskier divisions. Feinberg responded by demanding the return of $45 million in retention bonuses.
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