Money Matters - Simplified

Big-bank execs not asked to return bonuses

Washington -- Federal pay czar Kenneth Feinberg said Friday ill-advised bonus payments were made to executives of 17 U.S. financial firms in late 2008 and early 2009.

But Fineberg, who is also in charge of doling out BP oil spill claims, did not ask the firms, which include Goldman Sachs, Citigroup, Bank of America, Wells Fargo, JP Morgan Chase, CIT Group and AIG, to try to recover the nearly $1.6 billion in executive compensation, The Wall Street Journal said.

Feinberg concluded that it would not be fair to force the firms to return the bonus payments deemed excessive because that could lead to a storm of lawsuits and more congressional investigations.

President Barack Obama last year asked Feinberg to act as special master for executive compensation at the Wall Street firms bailed out by the government's Troubled Asset Relief Program during the economic crisis.

His study, a requirement of the 2009 economic stimulus bill, concluded the excessive payouts were misguided. Feinberg proposed a company's compensation committee restructure, reduce or cancel executive payouts when a firm is in trouble.

The Journal said it was not clear whether any of the 17 companies in the report would accept the recommendations for a so-called "brake provision" on executive compensation payouts.

"I have not heard much pushback from these companies on this request," Feinberg said. "They have not formally agreed. They have not formally disagreed. Some said we already do it."

Eleven of the 17 firms criticized in the study have repaid the government with interest, The New York Times said.

Copyright 2010 United Press International, Inc. (UPI).

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