Are pay curbs imposed by Pay Czar Ken Feinberg doing what they’re supposed to be doing?
As you likely know, Feinberg was appointed in June amid taxpayer outrage that firms getting federal funds were paying top executives exorbitant salaries.
In the past 6 month he has worked to curb compensation while still meeting company demands for competitive salaries to attract and keep talent.
On the eve of Wall Street bonus season we spoke with Ken Feinberg to check in on his progress. Here are some excerpts of our conversation.
Fast Money: How would you grade yourself?
Feinberg: So far we’ve done a pretty good job. BofA and Citi have repaid the taxpayer, every nickel that the taxpayer lent to those two banks. I consider that an important accomplishment.
However I also think the program gets an incomplete. There are still five companies that are still subject to my statutory jurisdiction. But I think it's gone the way the Congress and the administration wanted it to go when they enacted the statute.
Fast Money: Did Citi repay TARP so CEO Vikrim Pandit could pay his management team larger salaries?
Feinberg: (Feinberg wouldn't comment but he did say...) My primary objective was 1) to get the taxpayers money back which we are doing and 2) – let’s not micromanage these companies. I don't want to be a permanent fixture. I just want to get the money back to the taxpayer and get out from doing this.
Fast Money: When does your job go away?
Feinberg: My job goes away when the 5 remaining companies repay their TARP obligations. Now some of them have voiced public expressions of hope that the repayment will occur earlier rather than later. Others say it will be years. Under the statue, as long as they have not repaid the taxpayer they remain under the compensation jurisdiction of the Treasury department.
Fannie & Freddie
Fast Money: Freddie and Fannie executives seem to be getting fairly generous pay packages. Why did that happen?
Feinberg: Fannie and Freddie are not under my jurisdiction. But I must say they’ve raised two difficult problems. First, there is no stock (of much value) so all the compensation needs to be in cash.
And second, the future of Fannie and Freddie politically remains very uncertain. As a result it’s difficult to convince people to come to work for Fannie or Freddie when they don’t know how long there will be a Fannie or Freddie.
For our entire intervie with pay czar Ken Feinberg please watch the video above.
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CNBC.com with wires