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August 13th, 2009
07:02 PM ET

Bailed-out banks: Meet the pay czar

White House pay czar Kenneth Feinberg.

White House pay czar Kenneth Feinberg.

David Ellis
CNNMoney.com

Just how much is a rainmaker at a bailed-out bank really worth? Or a senior executive at a recently bankrupt automaker for that matter?

Such questions will soon be a subject of discussion at the White House as the biggest recipients of government aid begin submitting compensation plans for their top 100 employees to the Obama administration's recently appointed pay czar.

Seven companies - AIG (AIG, Fortune 500), Chrysler, Citigroup (C, Fortune 500), Chrysler Financial, Bank of America (BAC, Fortune 500), General Motors and GMAC - are due to submit proposed employment contracts for their 25 highest-paid employees Friday. Compensation proposals for the next 75 most compensated employees are due by Oct. 13.

Kenneth Feinberg, the man charged with handling the task, is expected to rule on the first set of pay plans within the next 60 days. That information is due to be made public by Treasury sometime after, although any announcement may not include details of pay packages for individual employees.

Keep reading...


Filed under: AIG • Bailout Turmoil • Economy • Finance
soundoff (11 Responses)
  1. meenas17

    Companies getting bail out, are emerging with proposal for higher pay packets for their staff. It is the height of audacity on one hand and fallacy on the other

    August 14, 2009 at 10:30 am |
  2. RLWellman

    Yea, let's just have the Government tell us how much we are worth. How about if we, the United States citizens tell our Government how much they are worth?

    Oh yea, I forgot, it doesn't matter. Why? Beacause the will just give themselves another raise. They are the ones who gave raises to all their CEO buddies, than said they didn't know what was in the Stimulis Bill.

    It's funny because they didn't read the Stmulis Bill and signed it anyways. Now they are saying they haven't read all the Health care Reform bill too, but they were going to sign it anyways.

    These are the kind of Representatives I want. Ones that don't even read what they sign.

    Remember, I still have a house I will sell you for 1-dollar. All you have to do is sign the paperwork without reading it first!

    August 14, 2009 at 1:35 am |
  3. Andy-Philadelphia

    The facts concerning Citi's obligation to pay the energy trader, Andrew Hall, should be completely understood. Andrew Hall's energy trading group generated over $600 million dollars for Citigroup. Citigroup agreed in a contract to pay Phibro 30% with Mr. Hall receiving 15%. This is a clear pay for performance contract. If the Phibro energy unit did not perform, Mr. Hall's group would receive less. This is not like the AIG contracts with pay outs to traders and other executives obligated regardless of performance. Mr. Hall and his group generated a significant return for Citigroup and earned every penny of their pay due to their exceptional performance. If Mr. Hall volunteers to restructure his contract, this decision should be between him and Citigroup without the government intervention by the pay Czar.

    August 13, 2009 at 11:46 pm |
  4. John

    I heard this trader that received the $100M bonus made $800M for the bank. If that iis true he deserves the bonus.

    August 13, 2009 at 11:24 pm |
  5. Jim Carroll

    WHY SHOULD WE BAIL-OUT THE DEVIL DAMN FRIGGING BANKS WHEN WE CAN SEND TEN MILLION UNEMPLOYED WORKERS BACK TO SCHOOL, AND PAY THEM $50,000 A YEAR FOR A LOT LESS
    MONEY THAN GIVING IT TO THE DEVIL DAMN FRIGGING BANKS?

    August 13, 2009 at 10:48 pm |
  6. Jim Carroll

    GETTING THROUGH THE MINDSET OF CONGRESS
    AND THE NEWS MEDIA IS LIKE GETTING THROUGH
    THE MINDSET OF KIM JONG-11 OF NORTH KOREA
    Gouging is not inflation. Inflation is a euphemism for theft.
    To control gouging, America needs a Department of Consumer
    Affairs. Gouging steals from the consumer, other businesses
    and shrinks the money supply.

    August 13, 2009 at 10:38 pm |
  7. JC-Los Angeles

    It's hilarious to hear the connected few who run companies into the ground while lining their pockets and traversing the globe on expense accounts claim that they need to pay out big bucks to retain talent.

    Huh? Say what? Come again? Excuse me? if one runs a company into the ground, how talented can one be?

    Regarding talent or lack thereof, how does one become so talentless? once they achieve this milestone, how does one even go about asking to be paid for a lack of talent? is there a sliding scale?

    Our once proud nation has been run into the ground by the thoroughly talentless connected few; while it would be perfectly acceptable to pay them to leave, to pay them to stay is beyond the pale.

    August 13, 2009 at 9:17 pm |
  8. Joe Fattal

    Every time I read or hear the word Czar, it reminds me of Russia and its Czar era. Usually regarded as a tyrant, an autocrat. I don't know about a tyrant, but an autocrat, it does fit the description of the Obama's administration.

    August 13, 2009 at 8:55 pm |
  9. Rob S

    It's amazing how these characters cut these deals ultimately at our expense. I agree with Annie, NO ONE is worth the kind of money they have been paid or are going to be paid, it's bloody ridiculous. And for the most part they screwed up, I wish I could go through life making a mess of things and being compensated they way they are, on second thought no I don't, not on my conscience anyway. I hope this is a wakeup call for all concerned, but somehow I doubt it.

    August 13, 2009 at 8:54 pm |
  10. Ron San Bruno, Ca

    rush uses the Pay Czar for propaganda, he say's its the beginning of government control of worker's p[ay. He envokes Hittlerish tactic's taking over. Well I see it like this, if the government saves your ass and your job and your insurance and your not happy, We the People say, find work elsewhere . Or join Camp limbagh for a carrier change opportunity of a lifetime .Speaker's are annie, bill and shane the mavrick alter boy., appearing nightly in the foxhole, if ya know what I mean .

    August 13, 2009 at 7:44 pm |
  11. Annie Kate

    I hope the "pay Czar" gets these salaries down out of the sky and into a more reasonable area – no one is worth 100 million a year. That sort of salary is obscene when so many others are without jobs or being grossly underpaid. I can see a doctor who saves lives making a ton of money but not some investment guru.

    August 13, 2009 at 7:24 pm |