Submitted by Mary Bottari on
According to the Wall Street Journal, federal "pay czar" Kenneth Feinberg will order seven bailed out financial institutions and auto companies to cut their compensation packages for top officers by 25%-50%. According to one professor interviewed, this represents a "seismic shift" in corporate governance. The seven companies are Citigroup, Bank of America, General Motors, Chrysler, GMAC, Chrysler Financial and AIG. These firms have received a total of about $250 billion in bailout funds from the federal Troubled Assets Relief Program (TARP). Missing are the other bailed out firms, such as Goldman Sachs, which benefited from the taxpayer lifeline, but has paid back TARP funds. Earlier this month, Feinberg formally approved the salary and compensation package of AIG's Robert Benmoche at $10.5 million. How will Benmoche and friends survive? Perhaps they can get some advice from the thousands of workers at these firms who lost their jobs this year.
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