Obama's pay czar limits pay packages for more top executives
For top-earning workers at Citigroup (C), American International Group (AIG), General Motors and GMAC, Feinberg has limited cash compensation at $500,000. The move affects the 26th through 100th highest-paid employees at the companies.
Feinberg, the U.S. special master on compensation, already slapped pay limits on the 25 executives with the richest total compensation at seven companies that received "exceptional" assistance from regulators, a group that includes the firms affected by Friday's rulings as well as Bank of America (BAC), Chrysler and Chrysler Financial.
Bank of America escaped the limits this week after repaying $45 billion it received from the Treasury Department's bank rescue fund, while Chrysler and its financing arm were unaffected because they had no executives making above $500,000 who weren't affected by the earlier caps.
About a dozen executives, including several at AIG, will be exempted from the limits. Because of "unique financial circumstances" at the insurer, which is in the process of unwinding billions of dollars in complicated derivatives contracts, the exemptions were necessary, Feinberg said, according to Reuters.
The rulings also limit the proportion of compensation that can come in the form of cash and require that at least half of the affected executives' pay must come in the form of long-term stock awards.
The pay caps come as France and the U.K. are considering levying hefty taxes on bankers' bonuses, and executives at Goldman Sachs (GS) voluntarily restructured their compensation to reduce the portion paid in cash. French President Nicolas Sarkozy and British Prime Minister Gordon Brown together authored an opinion piece in The Wall Street Journal Thursday calling for a global effort to tax financial compensation.
Political pressure, particularly on financial companies, to cut pay for top-paid executives has risen in tandem with public dissatisfaction over the high cost of government bailouts.
Results of a Bloomberg News survey released Thursday illustrate why Washington and Wall Street alike feel compelled to take another look at compensation. Some two-thirds of Americans hold unfavorable views of bankers, the survey found, making them even less popular than Congress, lawyers and insurance companies, all frequent targets of populist ire.