Pay czar: 17 bailed-out banks overpaid executives 23JUL10 JOIN moveyourmoney.info

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The government's pay czar announced Friday that 17 companies benefiting from federal bailout money handed out $1.6 billion in excess executive pay at the height of the financial crisis. The firms include Citigroup, Goldman Sachs and Bank of America.
Kenneth Feinberg, who was appointed as the Obama administration's special master for compensation, examined executives earning more than $500,000 at the 419 firms that received taxpayer assistance. Of the 17 companies that in Feinberg's judgment were egregious in their compensation, 11 have repaid the assistance received from taxpayers.
Citigroup was the worst offender, handing out $400 million in excess pay, according to a government source familiar with the report.
Other offending firms include JPMorgan Chase, Morgan Stanley, AIG and McLean-based Capital One.
Feinberg emphasized he is not asking the companies to pay the money back.
"This is an eleventh hour, armchair, 'look back' quarterbacking," Feinberg said Friday.
The report indicates the companies did not do anything illegal and that 90 percent of the executive payments were made by firms that have fully repaid taxpayers.
Feinberg, however, recommends that companies adopt an emergency provision that would allow them to break pay contracts if another financial crisis were to occur. If the company's board determined that the firm was in a crisis, the compensation committee would be allowed to revisit pay levels. During the recent banking meltdown, many companies protested that they were legally obligated to mete out their payment contracts with executives.
The special master has the authority to review pay but not to force any reimbursements from the banks. Feinberg did not determine the payments were "contrary to the public interest," because they were allowed at the time, although Treasury Department rules later imposed tougher limits on pay for bailout recipients.
Other companies singled out by the report include Boston Private Financial Holdings, CIT, M&T Bank, SunTrust, Bank of New York Mellon, Regions Financial, PNC Financial and U.S. Bancorp.
The excessive pay was reported at only a small group of the 419 firms examined. The report found that out of the entire pool of firms receiving taxpayer funds, 240 did not give excess pay to any executives. A subset of 116 firms handed out too much money to five or fewer executives.
Many of the country's biggest banks have repaid their bailout funds, including Goldman Sachs, J.P. Morgan, Bank of America and Wells Fargo. Companies that are still on the hook include AIG, SunTrust and CIT.
As his work as pay czar winds down, Feinberg will soon focus all his attention on overseeing the BP oil spill compensation fund.