Pay Czar Sees AIG Bonuses As Top Priority

By Sarah Borchersen-Keto, CCH Washington News Bureau, Contributing Author, the CCH Federal Banking Law Reporter, October 28, 2009.

Reworking roughly $180 million in guaranteed bonus contracts that come due at American International Group’s financial products division next year is a “top priority,” Special Master for TARP Executive Compensation Kenneth Feinberg told Congress October 28. “We will see what we can work out with AIG going forward in an effort to satisfy the statute, satisfy the regulations, satisfy the American people. And I view that as a top priority,” Feinberg told the House Oversight and Government Reform Committee.

Feinberg added that he has no desire to extend his compensation oversight responsibilities beyond the seven major firms that received exceptional government assistance. “I do not believe…that we should be micromanaging other companies in the private sector,” Feinberg said, adding that he hopes his recommendations will have a voluntary effect in influencing how the private sector conducts its compensation practices.

Committee Chairman Rep. Edolphus Towns, D-N.Y., said it was a “shame” to have the government involved in bank compensation issues. However, “Wall Street can no longer be trusted to control themselves. Some constraints on these companies are necessary to protect the safety and soundness of the entire financial system,” he added.

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