Kenneth Feinberg to attack 'ill-advised' Wall Street remuneration

23 July 2010

US pay czar Kenneth Feinberg is to attack the remuneration levels of Wall Street banks in a new report.

A source told the Wall Street Journal that his paper will name 17 firms that made $1.6 billion worth of payments to its staff at the height of the financial crisis, a move Mr Feinberg is set to describe as "ill-advised".

His report will detail the salaries and bonuses handed out to employees at firms that were receiving bailout funding from the government after he spent four months conducting his review into the 419 companies that took money from the public purse.

Among those which are expected to be criticized in his findings are Goldman Sachs, Citigroup and JPMorgan Chase.

Despite being the Obama administration's special master for compensation, Mr Feinberg does not have the power to request the return of any of the money.

His leverage has been further reduced by the fact that many of the companies that received state funding have now repaid the Treasury Department, often at a profit to the government.

However, Mr Feinberg is expected to call on financial institutions operating in the US to limit their ability to pay out high salaries and bonuses if such a crisis was to reoccur.

The pay czar's remit does give him the authority to seek reimbursement on pay deemed to be "inconsistent" with rules laid down by Congress last year, or with any remuneration said to be "contrary to the public interest".

In such cases, he is able to renegotiate the payments with the affected parties.

Earlier this week, President Obama signed his financial reform bill into law, which contains a series of measures designed to prevent a repeat of the financial crisis.

"Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes," he stated.

By Gary Cooper

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