Investigation launched into bonuses at TARP banks by US pay tsar

24 March 2010

Bonus payments made at US banks including Goldman Sachs and JPMorgan which took advantage of the Troubled Asset Relief Program (TARP) are to be analysed by the US government’s pay tsar.

Kenneth Feinberg, special master for executive compensation, is to send letters to all the banks and financial service providers which used TARP funds during the global financial crisis.

A total of 419 organisations will be contacted and asked to provide details on salaries of more than $500,000 paid to top executives.

The institutions contacted will have up to 30 days to provide information on payments made between October 2008 and February 2009.

Cornelius Hurley, director of the Morin Centre for Banking and Financial Law at Boston University, told Reuters: “If the notion was to see who had their hand in the cookie jar when the crisis was unfolding, then that should be revealed.”

Mr Feinburg does not have the power to force executives to return any pay packages.

However, if it is deemed in the “public interest”, he could renegotiate figures with bankers.

The tsar is also expected to reveal pay packets for executives at the five firms still receiving state bailouts as part of TARP.

General Motors, AIG and Chrsyler are among the organisations continuing to rely on the program of fiscal stimulus.

By Jim Ottewill

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development