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U.S. pay czar Kenneth Feinberg Friday emphasized his ability to claw back pay at any company receiving a taxpayer bailout but said such an extreme action "will be rare and far between."
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AP Kenneth Feinberg |
Feinberg said he has not really explored how he will use the clawback power and will only exercise it when he finds "an egregious fact pattern."
"There may be situations where, you want a good example, is the CEO for Bank of America [BAC Loading... ()], where we thought it important to claw back," Feinberg told reporters after speaking at George Washington University Law School.
Bank of America Chief Executive Ken Lewis, who has announced he will leave the company by the end of the year, will receive no more pay for 2009 and will have more than $1 million of his prior pay clawed back, according to a deal Feinberg struck.
The pay czar emphasized that he can use his power to claw back pay at all companies that received bailouts under the government's Troubled Asset Relief Program, not just the seven companies for which he has explicit authority to rework compensation plans.
The seven companies are American International Group [AIG Loading... ()], Bank of America, Citigroup [C Loading... ()], General Motors, Chrysler, GMAC and Chrysler Financial.
On Thursday Feinberg slashed compensation for the top 25 earners at the seven companies for the final two months of the year, when bonuses are typically paid. He cut cash payouts by 90 percent and overall compensation by 50 percent.
On Friday he emphasized his hesitancy to use his broad clawback power.
"I am reluctant to become a bill collector or a Treasury official reaching out and trying to get back compensation long since distributed, long since cashed, long since spent," he said.
He added that in deciding how dramatically to rework pay plans, he had listened to a lot of arguments about which employees were critical to a company.
Bank of America said on Thursday that Feinberg's rulings would put it at a disadvantage as it competes with firms not under the pay czar's thumb. The bank said its employees were already being poached by rivals.
Feinberg said Friday he has not yet received any appeals against his rulings.
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