The Pay Czar has spoken. Here are the new rules for TARP-scrounging firms, about a year too late…
WASHINGTON (MarketWatch) — Kenneth Feinberg, the Treasury Department official in charge of setting compensation for bailed-out companies, said Thursday his primary goal was to get the banks to the taxpayer’s money. “Taxpayers are in deep with these seven firms,” Feinberg, known as the pay-czar, told reporters at a briefing where he detailed pay cuts at the firms. Feinberg reviewed the pay for 25 top earners at the seven companies and said he found, without exception, that the compensation was too high and not aligned with shareholder interest. As a result, Feinberg cut the cash salaries of the executives by more than 90% and total compensation by more than 50%. Under the new pay packages, banks executives will receive “salarized-stock” that vests over a multi-year period. Feinberg’s decision only covers the last two months of 2009 but will set the basis for 2010 salaries.
However will they live on just a guaranteed 500k a year? The horror! “Salarized Stock” will be the new buzzword in HR offices all over The Street now that the word “Bonus” is taboo.