The Obama administration says it's chosen a Treasury Department lawyer to replace pay czar Kenneth Feinberg, who stepped down Friday, ending a contentious 14-month tenure.
Feinberg was accused of failing to act aggressively enough to recoup excessive pay for Wall Street bankers. He said in a final report that he thought his work had helped reform compensation policies.
The administration says Feinberg will be replaced by Patricia Geoghegan. She will be responsible for setting pay guidelines for top executives at the four companies still getting exceptional assistance from the government's $700 billion bailout fund.
Those companies are American International Group, General Motors, Chrysler and Ally Financial Inc., the financing arm for GM and Chrysler.
Geoghegan spent much of the past year working with Feinberg as he issued a series of compensation reports. She came to Treasury after retiring as a partner from New York law firm Cravath, Swaine and Moore, where she had specialized in tax law and executive compensation.
In his report, Feinberg recommended that the administration tap a permanent Treasury official to head up the compensation office.
He also recommended that the core compensation guidelines that had been developed should continue to serve as the guides for future compensation decisions. Those standards include placing limits on guaranteed cash payments and requiring that compensation packages have a significant performance component.
"Focus on long-term value creation. Stop excessive perquisites and other giveaways. And hold the line on cash salaries," Feinberg wrote in his report.
Feinberg's last day at Treasury was Friday although he has been devoting much of his time since mid-June to overseeing a $20 billion fund created by BP to pay the victims of the oil spill in the Gulf of Mexico.
Before being chosen as the government's pay czar in 2009, Feinberg had headed up the Sept. 11 Victim Compensation Fund after the terrorist attack. In that job, Feinberg distributed awards to the families of victims of the 2001 terrorist attacks.
Feinberg came under criticism for the way he handled his duties as pay czar with lawmakers including Sen. Bernie Sanders, I-Vermont, who contended he had not been tough enough in cracking down on pay excesses on Wall Street in the wake of a severe financial crisis that forced the government to provide billions of dollars in support to major financial institutions.
Feinberg announced in July that he would not try to recoup $1.6 billion in compensation given to top executives at 17 bailed-out banks. While he said he thought the banks had made "ill-advised" payments, he said he decided not to try to force repayment of the money.
The law under which his office was created instructed him to negotiate with banks getting exceptional government support to return money if he determined that any pay packages were "contrary to the public interest." However, Feinberg opted not to exercise that authority.
Sanders in July criticized that decision, saying, "These people's jobs were saved by the taxpayers of this country and their response was to give themselves these huge bonuses."
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