The United States “pay czar,” Kenneth Feinberg, is going to be reviewing the pay and bonuses of 419 firms that received TARP (bailout) monies to see if those funds were paid out properly in the midst of the crisis in 2008. Included in those firms are AIG, Citigroup, General Motors, Goldman Sachs, J.P. Morgan Chase, and Morgan Stanley. This review was required under TARP.
It will be very interesting to see how pay was allocated at these firms when they so clearly had failed to earn profits, improve shareholder returns, corrupted the worldwide financial system, and generally behaved irresponsibly for half a decade. But more importantly, the critical question is: have these firms changed their compensation practices to ensure that the irresponsible choices made in the past do not occur again? I will be watching.
Jason
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