The sources said the administration is expected to name Kenneth Feinberg, who oversaw the federal government’s compensation fund for victims of the September 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, according to the WSJ. Feinberg’s appointment could be announced as early as next week, when the administration is expected to release executive-compensation guidelines for firms receiving aid from the $700 billion Troubled Asset Relief Program (TARP).
Earlier this year guidelines were issued, which included limiting salary for top executives at some firms receiving TARP funds and requiring that additional pay be in the form of restricted stock, vesting only after the company repays its debt, with interest, to the government. Congress then proposed legislation that included even tougher rules (see House Bill Carries new TARP Exec. Comp. Curbsand Dodd Proposes Retroactive Exec Pay Limit ).
The government is also pursuing a separate revamping of financial sector rules that could change industry compensation practices more broadly (see Geithner Reported Considering TARP Exec Comp Rule Extension ).
Feinberg is expected to focus on pay restrictions related to firms receiving TARP bailout funds, helping companies to interpret the rules and ensure that they are being followed, the news report said. Companies have been confused about whether to pay 2008 bonuses, since restrictions on incentive pay didn’t go into effect until early 2009, and many firms are also unsure whether the “top earners” targeted by Congress include rank-and-file employees or just executives.
Feinberg will report to Treasury Secretary Timothy Geithner, but is expected to have wide discretion on how the rules should be interpreted. Firms likely won’t be able to appeal decisions that he makes to Geithner, the sources told the WSJ.
Feinberg is founder and managing partner of the law firm Feinberg Rozen LLP.
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