Kenneth Feinberg, the Obama administration's "pay czar", issued a report today singling out 17 banks for payment practices that allowed their executives to pocket $1.6 billion even as their firms took federal bailout funds.
At a news conference on Friday, Feinberg stressed that the firms did nothing illegal, but that their actions reflected "bad judgment" that was "contrary to the public interest."
Later, President Obama, speaking briefly at the White House, said the review was meant to put firms on notice "that continued to pay out lavish bonuses" as they received government assistance.
Feinberg reviewed pay to the top 25 executives at 419 companies that received taxpayer funds to stay afloat before Congress clamped down on executive compensation in February 2009.
The Associated Press reports:
The review covered the period from October 2008 to February
2009. The starting point was when banks began receiving bailout
money from the $700 billion Troubled Asset Relief Program. The
ending point was when Congress enacted pay curbs on institutions
receiving government support.
Feinberg said he was hopeful that Citigroup, Bank of America, Goldman Sachs and others would adopt emergency provisions to claw back compensation:
If the company's board of directors has identified that
the firm is in a crisis situation, the compensation committee
would have the authority to restructure, reduce or cancel
pending payments to executives — and this authority would
supersede any rights and entitlements executives have in normal
circumstances, he said in summary.
Here's the Department of the Treasury's fact sheet.