Tags: pay | czar | bank | salaries

Pay Czar: Top Bank Salaries Will Be Cut

Tuesday, 06 Oct 2009 09:05 AM

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The Obama administration's pay czar plans to cut the cash salaries of the top employees at seven firms that have received large sums of government aid, in a bid to reshape their compensation packages, the Wall Street Journal said on Tuesday, citing people familiar with the matter.

Kenneth Feinberg plans on shifting a chunk of an employee's salary, in some cases more than 50 percent of the total salary, into stock that cannot be accessed for several years, the paper said.

Feinberg has been consulting with seven companies -- American International Group, Bank of America, Citigroup, General Motors, GMAC, Chrysler LLC and Chrysler Financial.

The Journal said the reworking of the pay packages is aimed at salaries solely, and not bonuses, adding, however, that the U.S. Federal Reserve is not expected to follow Feinberg's strategy.

According to the Journal, the situation could particularly affect Bank of America, by complicating the troubled bank's efforts to attract a suitable successor for its outgoing Chief Executive Ken Lewis.

U.S. Treasury department representatives could not immediately be reached for comment outside regular U.S. business hours.

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