Ken Feinberg has been reviewing the compensation proposals at a number of significant federally bailed-out companies; notably AIG, BofA, Citigroup, GM (and GMAC), and Chrysler (and Chrysler Financial). It was widely expected he will lean heavily towards cutting salary compensation in favor of deferred equity compensation. It is now being reported that AIG's CEO Robert Benmosche's compensation for 2009 has formally been approved by Feinberg. Feinberg wrote to AIG's compensation committee that Benmosche's $3 million in salary and $4 million in deferred equity compensation was "appropriate" when compared to peer executives.Kenneth Feinberg more appropriately carries the title of Special Master under the Treasury Department, but is frequently referred to as the Compensation Czar. The Obama Administration anticipates Feinberg's decisions to be a model "best practices" moving forward, but it is apparent the Federal Reserve may move in a slightly different direction when it announces its pay re-regulation as regards the banking industry. The bottom-line across the board in both instances, however, is to effecitvely incentivize workers to forgo undue short-term risks so as to concentrate on long-term financial profitability and stability.
Previous blawg discussion by either Allen or myself regarding Kenneth Feinberg can be found here. All blawg discussion regarding executive compensation can be found here.
Photo credit: Associated Press via WSJ.
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