Pay Czar Ken Feinberg Raised Base Pay At Bailed Out Firms

Wall Street Journal:

Treasury Department pay czar Kenneth Feinberg last week announced sharp cuts in total compensation at the finance and auto companies under his control.

But while he cut total compensation by half, he substantially increased one important element -- regular salaries, according to a Wall Street Journal analysis.

Read the whole story: Wall Street Journal

Comments

[nextuser]

same old same old. stock market surging. more job loss. no heath care reform. no extension of unemployment benefits. more same cr4p.

good articles; http://financeopinionss.blogspot.com

no point in voting

[nogimmicks]

Czar : fair and balanced (not). Thank you Obama for the bailouts and for giving the unchecked power to those clowns.

[hopefull2008]

The only thing that matters is what he does to total compensation. Misleading half story.

[retreadite]

Couldn't read the whole article but as I understand it Feinberg isn't doing anything to stop the outrageous stock options that top bank officials are getting (and worth several times more than salaries). The only requirement is that they are not to be exercised until all bailout money is repaid---big whoop. Does anyone know if this true?

[klo]

Thanks to those trying to educate. It seemed like a gotcha headline and from the comments, it was for those who don't understand how many WSers are paid.
If they are must endure huge cuts in bonuses, then the base pays would have to be adjusted up since in many cases they are comparatively low. And though a base pay raise to a person with a $250K salary and $5M bonus might seem outrageous, getting a base pay raise with a bonus cut will save money overall and likely result in the retention of many of these employees. Not to do so could result in the exodus of these staffers which could leave the recovering companies short of tenured talent and in weaker positions due to the loss of staff with institutional knowledge.
And though some think these folks are just overpaid in general, a gov't mandated reduction to those previously highly paid persons, would be murder to companies the gov't has stepped in to try to help. It would be like cutting off one's hands...So, maybe this is not an unreasonable alternative.

[Bitsko]

Well, that was a short unsubstantiated smear by the WSJ.

[Democratuser]

We need more stimulus spending. More jobs programs. Lets pray that Obama can get it done. Millions of lower & middle class Americans are falling through the cracks. We need a bailout to help them, not the banks.

hat tip to http://financeopinionss.blogspot.com

lets get unemployment benefit extension passed

[niblik]

Isn't it a good thing that the base wages of the regular workers has been raised? Shouldn't this help out the middle class?

I'm all for reversing the $400 x base pay that CEOs have been gulping down but I can't see that its bad for folks on the bottom rung to get a raise.

[gschear]

This is not a story. Base compensation may have been below market because of the stupidly large bonus arrangements. If the end result was a 90 to 50% cut in pay then it is a 90 to 50% cut in pay. Come on Huffpo, this is a Wall Street Journal article. Who owns that rag?
Tea anyone?

[indi1216]

agree. People needs to be more educated instead of jumping into conclusion. It is because on the curb of base pay, do we have this excessive huge bonus contracts that exist today. Curbing bonus and not salary. Many bankers have a $7 million / year salary, but have have $100 million bonuses. Does that make sense?

[GroundhogBoy]

Yes...it allows the bank to retain capital, which it can utilize throughout the year. It also allows them to pay for performance.

Secondly, no one gets paid $100M in cash (and actually, I don't think anyone makes $100M period, but source something if you'd like). It's mostly stock, which depends on company performance. Some at a large bank, say Goldman...or Lehman, may have made $20M in 2007 in bonuses, mostly stock. When Lehman got sold for $2, those bonuses became worth about 1-2% of initial value. And that's the definition of pay for performance.

[Echoesofhope]

So what? Another inane headline by folks who think being able to spew 60 words a second is genius.

[Fentwin]

Meanwhile back at the farm;

my state took 4% of my yearly salary out of the last paycheck of last year and my state insurance is increasing their paycheck deduction by another 8%. I guess I'm not rich enough for a bail out nor a pay raise



Yes, 'tis goos to be the king.

[kingbuzz]

sold out.

[gs-425]

the ability of a government official to control private industry pay whether it is raised or lowered is unacceptable. And yes, I could give two craps if that firm took bailout money or not.

[amdezurik]

if they took our money they ain't private anymore.

[gs-425]

and by mob rule....

[GroundhogBoy]

You do realize that some of them were forced to take that money, right? Just to make sure some didn't appear stronger than others and to prevent runs on the banks. JP Morgan would have been fine without any TARP money. Why do you think the government begged Jamie Dimon to bail out Bear Stearns? He was going to pay more for the shares, but Paulson said no because it would look like more of a government bailout. The bottom line is that they had the capital to withstand that sort of short-term bottom line hit.

[doubtingdavid]

More of the same. That hope and change thing does not seem to be working out so well.

[diak0n0s]

Thank you HuffPO for your honesty.

Now we need to hold this administration's feet to the fire with these crooks.,

[vippy]

That if they had a conscience. Who are we anyway, the masses, the stupid. See how blatantly they do what they do and get away with it. What are we to do. Hopefully, people will throw them out of office next election, all of them!