U.S. pay czar Kenneth Feinberg sees early signs some Wall Street firms are voluntarily toughening up on the way they pay executives, but he cautions it remains to be seen whether such behavior becomes permanent.
Feinberg, who still supervises pay practices at five firms that received money under the government's Troubled Asset Relief Program (TARP), told Reuters these signs include increasing the amount of salary paid in the form of stock and tying individual performance to company performance.
"It's too early to tell," Feinberg told Reuters on the sidelines of the Milken Institute Global Conference.
"There are some early small signs that companies are adopting the prescriptions." The pay czar's recommendations have come under fire, with American International Group Inc objecting to pay restrictions in some instances.
AIG Chairman Harvey Golub said in February that, while the bailed-out insurer could pay most of its employees competitively, "on occasion, these restrictions and his decisions have yielded outcomes that make little business sense." Feinberg said he did not agree with Golub's criticism.
"I have high regard for Mr. Golub," Feinberg said.
"But I can't agree." Feinberg also said a regulatory reform bill being debated now "is absolutely the right way to go."
"I have always said that there is a chasm in perception the way that Wall Street looks at executive pay and the way Main Street looks at executive pay," Feinberg said.
"I have found over the last year that Wall Street basically is tone deaf when it comes to appreciating the degree of anger that is out there among the American people as to this whole issue of executive pay."
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