The Treasury Department’s “pay czar”, Kenneth Feinberg, commented on Thursday that he is concerned about scaring away some of the best talent at seven firms, including Bank of America (NYSE: BAC) and American International Group (NYSE: AIG), which received the largest bailouts from the U.S. government.
Feinberg commented, “The determinations I render I design first and foremost to make sure those companies thrive and that the taxpayers get their money back.”
Feinberg spoke following a report that American International Group CEO, Robert Benmosche, was threatening to leave his post because of Feinberg’s oversight of compensation at the firm. Benmosche later commented that he was frustrated, but did plan to stay on at AIG.
AIG received an aid package from the federal government worth up to $180 billion in exchange for an 80% ownership share in the company. The bailout package also includes restrictions for the firm’s 100 top-paid employees.
AIG is not the only firm having trouble keeping or hiring top talent because of the pay restrictions. Bank of America, which was hoping to announce its new CEO last month, has still to do some. Some internal rumors have suggested that the group of board members in charge of finding a new CEO have had difficulties courting talent from outside the company because of the pay restrictions.
Feinberg currently oversees executive compensation at AIG, Bank of America, Citigroup, General Motors, GMAC, Chrysler, and Chrysler Financial.
While speaking at the Bloomberg Washington Summit, Feinberg commented that no company had formally appealed his decisions about compensation for the 25 top-paid employees, but only that Bank of America and AIG had raised informal objections.
