Feinberg Issues New Salary Caps for TARP Firms
New compensation rules issued Friday will cap 2009 pay at $500,000 cash for about 450 employees at four companies that have received government bailout funds. The new guidelines affect the 26th- through 100th-highest-paid employees at the affected firms, which include Citibank, GM, AIG and GMAC. Chrysler and its financing arm were not included because none of their employees make more than $500,000, pay czar Kenneth Feinberg told reporters this morning at a briefing. About a dozen people at the various companies will be exempt, reportedly because they have already been paid more than $500,000 for 2009. In October, Feinberg slashed compensation for the top 25 earners at seven firms that received TARP funds, with salary caps also put at $500,000 cash. Because Bank of America* repaid $45 billion in TARP funds this week, today’s second-tier pay caps do not apply. But October’s caps on its top 25 executives remain in place for this year. Feinberg said he hopes to see companies emphasize in the future “less cash, more stock, longer-term stock, limited perks.” The news comes as Britain and France have both moved this week to enact a windfall tax on bankers’ bonuses. A one-time 50-percent tax on 2009 bonuses in the UK was announced Wednesday, and French officials are expected to unveil a similar policy soon. In the United States, Goldman Sachs, responding to public outrage over its profits, announced Thursday that its top 30 executives will not receive cash bonuses this year, despite record profits. Instead, the Goldman brass will receive bonuses in the form of company stock, which, as Louise Story writes in the New York Times, still could be “enormously lucrative if Goldman’s share prices rise over time.” Tonight on the NewsHour: Feinberg sits down with Judy Woodruff to explain the latest pay caps. Be sure to tune in. *For the record, Bank of America is a NewsHour underwriter. With additional reporting by Jenny Marder.