Report: Firms that got bailout funds gave $1.6B in excessive compensation
Thursday, July 22, 2010; 10:14 PM
More than a dozen companies that received federal bailout money handed out $1.6 billion in excess executive compensation at the height of the financial crisis, according to a report to be released Friday by the government's "pay czar."
Kenneth Feinberg, who was appointed as the Obama administration's special master for compensation, will single out 17 companies for egregious payment practices, according to sources familiar with the findings who spoke on condition of anonymity because the report had not yet been released. Out of these companies, 11 have paid back the assistance received from taxpayers.
The firms did nothing illegal, the report found, but Feinberg will recommend that companies adopt an emergency provision that would allow them to break compensation contracts if another financial crisis occurred. During the recent crisis, many companies protested they were legally obligated to mete out their payment contracts with executives.
Feinberg, who will soon focus on his work as overseer of the oil spill compensation fund, does not have the authority to claw back the excess pay.