Feinberg (Pay Czar) Said to Review $500,000-Plus Pay Packages at 150 Firms - 5 May 2010
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I just saw this information from Frank Glass at Veritas. Not sure how I feel about it. One one hand these companies did take taxpayer money (although not all claim they needed it). On the other hand, this takes "say on pay" to uncomfortable levels.
What are your thoughts on the Pay Czar reviewing the pay at 150 companies and perhaps releasing individual names with pay misalignment?
Feinberg
Said to Review $500,000-Plus Pay Packages at 150 Firms
Said to Review $500,000-Plus Pay Packages at 150 Firms
By Ian Katz, BUSINESSWEEK - May 5, 2010
Employees at more than 150
companies that received U.S. government aid when bailouts began will
have their compensation scrutinized as part of a widening review by
Obama administration pay supervisor Kenneth Feinberg, said two officials
familiar with the matter.
companies that received U.S. government aid when bailouts began will
have their compensation scrutinized as part of a widening review by
Obama administration pay supervisor Kenneth Feinberg, said two officials
familiar with the matter.
Feinberg
is analyzing compensation beyond the seven companies he has already
checked and reaching back before he was appointed by President Barack
Obama in June. He may use publicity to pressure executives to return
compensation even if he doesn’t have the legal authority to recoup the
money.
is analyzing compensation beyond the seven companies he has already
checked and reaching back before he was appointed by President Barack
Obama in June. He may use publicity to pressure executives to return
compensation even if he doesn’t have the legal authority to recoup the
money.
Feinberg,
64, sought data covering a four-month period in 2008 and 2009 from
firms including JPMorgan Chase & Co. and Goldman Sachs Group Inc.
that received aid under the $700 billion Troubled Asset Relief Program.
The review, required by law to determine whether any payments were
inappropriate, covers employees earning more than $500,000 a year.
64, sought data covering a four-month period in 2008 and 2009 from
firms including JPMorgan Chase & Co. and Goldman Sachs Group Inc.
that received aid under the $700 billion Troubled Asset Relief Program.
The review, required by law to determine whether any payments were
inappropriate, covers employees earning more than $500,000 a year.
The
review and any statements Feinberg makes may cause “retroactive
embarrassment” for some companies without compelling them to return any
money, said Frank Glassner, chief executive officer of San
Francisco-based Veritas Executive Compensation Consultants LLC. “But he
can’t force them to do anything,” Glassner said. “He doesn’t have the
authority to alter contracts that have already been written.”
review and any statements Feinberg makes may cause “retroactive
embarrassment” for some companies without compelling them to return any
money, said Frank Glassner, chief executive officer of San
Francisco-based Veritas Executive Compensation Consultants LLC. “But he
can’t force them to do anything,” Glassner said. “He doesn’t have the
authority to alter contracts that have already been written.”
Of
the 419 companies surveyed, more than half are exempt from Feinberg’s
review because none of their executives earned at least $500,000, one of
the officials said. Feinberg set the $500,000 threshold because it’s
unlikely employees earning less are engaging in pay practices contrary
to the public interest, the official said.
the 419 companies surveyed, more than half are exempt from Feinberg’s
review because none of their executives earned at least $500,000, one of
the officials said. Feinberg set the $500,000 threshold because it’s
unlikely employees earning less are engaging in pay practices contrary
to the public interest, the official said.
March Questionnaires
More
than 50 of the 419 firms receiving questionnaires from Feinberg in
March said they had more than five executives making $500,000, said one
of the officials, who declined to be identified because the survey
results haven’t been made public. More than 100 firms said they paid one
to five people at least that much.
than 50 of the 419 firms receiving questionnaires from Feinberg in
March said they had more than five executives making $500,000, said one
of the officials, who declined to be identified because the survey
results haven’t been made public. More than 100 firms said they paid one
to five people at least that much.
His
request covered the period from October 2008, when bailout money was
first awarded, to February 2009, when Obama signed economic stimulus
legislation that included executive-pay curbs.
request covered the period from October 2008, when bailout money was
first awarded, to February 2009, when Obama signed economic stimulus
legislation that included executive-pay curbs.
Feinberg,
who plans to release his opinion within 30 days, declined to identify
firms whose executives earned more than $500,000. He said in March he
may use the “bully pulpit” to get companies to return money and said he
will probably identify by name employees who received pay he deems
excessive.
who plans to release his opinion within 30 days, declined to identify
firms whose executives earned more than $500,000. He said in March he
may use the “bully pulpit” to get companies to return money and said he
will probably identify by name employees who received pay he deems
excessive.
In
March, Feinberg told the five companies whose pay he supervises to cut
cash compensation 33 percent from last year. Total pay in 2010,
including cash, will fall by about 15 percent for the 119 highest-paid
executives at American International Group Inc., General Motors Co.,
GMAC Inc., Chrysler Group LLC and Chrysler Financial Corp. Compensation
at Citigroup Inc. and Bank of America Corp. was under Feinberg’s
oversight until they repaid taxpayer funds in December.
March, Feinberg told the five companies whose pay he supervises to cut
cash compensation 33 percent from last year. Total pay in 2010,
including cash, will fall by about 15 percent for the 119 highest-paid
executives at American International Group Inc., General Motors Co.,
GMAC Inc., Chrysler Group LLC and Chrysler Financial Corp. Compensation
at Citigroup Inc. and Bank of America Corp. was under Feinberg’s
oversight until they repaid taxpayer funds in December.
*****************************************************************************************************************************
Veritas Executive
Compensation Consultants, LLC. (“Veritas”) is a truly independent
executive compensation consulting firm.
Compensation Consultants, LLC. (“Veritas”) is a truly independent
executive compensation consulting firm.
We are independently owned, and have no
entangling relationships that may create potential
entangling relationships that may create potential
conflict of interest
scenarios, or may attract the unwanted scrutiny of regulators,
shareholders, the media, or create public outcry.
scenarios, or may attract the unwanted scrutiny of regulators,
shareholders, the media, or create public outcry.
Veritas also believes
that public company Boards of Directors and shareholders deserve higher
standards of disclosure that verify the independence of the executive
compensation advice that their companies receive from their consulting
firms. This disclosure will assist in curing the terribly negative
views that government regulators, shareholders, employees, the media,
and the American public have on executive pay.
that public company Boards of Directors and shareholders deserve higher
standards of disclosure that verify the independence of the executive
compensation advice that their companies receive from their consulting
firms. This disclosure will assist in curing the terribly negative
views that government regulators, shareholders, employees, the media,
and the American public have on executive pay.
Veritas goes above and
beyond to provide unbiased executive compensation counsel. Since we are
independently owned, we do our job with utmost objectivity - without any
entangling business relationships.
beyond to provide unbiased executive compensation counsel. Since we are
independently owned, we do our job with utmost objectivity - without any
entangling business relationships.
Following stringent
best practice guidelines, Veritas works directly with boards and
compensation committees, while maintaining outstanding levels of
appropriate communication with senior management.
best practice guidelines, Veritas works directly with boards and
compensation committees, while maintaining outstanding levels of
appropriate communication with senior management.
Veritas promises no compromises in presenting
the innovative solutions at your command in the complicated arena of
executive compensation.
the innovative solutions at your command in the complicated arena of
executive compensation.
We deliver the advice that you need to
hear, with unprecedented levels of responsive client service and
attention.
hear, with unprecedented levels of responsive client service and
attention.
Visit us online at www.veritasecc.com, or contact our CEO Frank
Glassner personally via phone at (415) 618-6060, or via email at fglassner@veritasecc.com.
He’ll gladly answer any questions you might have.
Glassner personally via phone at (415) 618-6060, or via email at fglassner@veritasecc.com.
He’ll gladly answer any questions you might have.
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