The Federal Reserve is working toward proposing broad rules for compensation at financial firms. European Union leaders are doing the same. But, the most specific proposal on banker pay may have come from the new treasury "czar" who has been asked to create a plan backed by the U.S. government. He may have tipped his hand during a speech on September 17.
In an exclusive report for BNET, pay "czar" Kenneth Feinberg said he favored compensating bankers with stock and not cash. While his suggestion applies to firms that have received bail-out money, it may be part of a road-map for the entire industry. BNET writes, "Under Feinberg's plan, managers may get restricted stock they are barred from selling for three to five years. They also could receive stock that may not be sold until the company meets certain benchmarks, such as repayment of TARP obligations, or the IPO or sale of a specific business unit."