Business Digest: Pay czar says he can claw back pay at rescued firms
Pay czar says he can claw back pay at rescued firms
U.S. pay czar Kenneth Feinberg emphasized his ability to claw back pay at any company receiving a taxpayer bailout, but said such an extreme action "will be rare and far between." Feinberg said he has not really explored how he would use the claw-back power and would only exercise it when he finds "an egregious fact pattern."
A good example "is the CEO for Bank of America, where we thought it important to claw back," he told reporters. Bank of America chief executive Kenneth D. Lewis, who plans to leave the company by the end of the year, will receive no more pay for 2009 and will return more than $1 million of his prior pay.
Feinberg emphasized that he can use his power to claw back pay at all companies that received bailouts under the government's Troubled Assets Relief Program, not just the seven companies for which he has explicit authority to rework compensation plans. The seven firms are American International Group, Bank of America, Citigroup, General Motors, Chrysler, GMAC and Chrysler Financial.
Countrywide Financial received a subpoena from the House Oversight and Government Reform Committee for documents related to a home-loan program that gave preferential terms to certain customers. The committee also asked for information from other lenders, including Wells Fargo, J.P. Morgan Chase and Citigroup.
The panel did not issue subpoenas to those companies, but said more subpoenas will be issued if those companies fail to respond to requests. The Countrywide subpoena covers records that could show favorable treatment for lawmakers.