Perhaps alternate employers without salary caps — because their companies didn’t require a massive government bailout after failing to manage risk, understand complex derivatives and stay afloat — didn’t think the best hiring bets were a bunch of whiny guys who tried to bail on their failing companies after determining that failure might mean lower salaries? That’s just a layperson’s guess, though.

It’s not as though Feinberg is taking it easy on them, either.

Pay for top earners at [the 5 companies that received multiple bail-outs and haven't paid them back], on average, is expected to fall by 11 percent from 2009, to $1.62 million, according to people briefed on the situation. Compensation is down nearly 77 percent from 2008. And this year, more than 70 percent of all approved compensation is expected to be given in the form of stock instead of cash.

Ouch. Only an average salary of $1.62 million? That might be going a little easy on them, it’s true. Unemployment — in New York State at least — pays $405 a week, though, regardless of how much you earned before your company went under.

Feinberg also doesn’t take kindly to whiners.

Officials at some of the companies had fiercely insisted that they needed to pay hefty salaries to retain senior executives and allow them to maintain a comfortable living standard, according to people close to the talks. Mr. Feinberg countered by lowering cash payments and awarding more stock. His rulings will take effect immediately, with amounts retroactively adjusted for any money paid in the first few months of 2010.

That will teach anyone to complain, I guess. Michael Carpenter, the new CEO of GMAC, was offered a $9.5 million salary, rejected by Feinberg — and, in response to arguments from GMAC that they needed to pay him more, Feinberg allowed them to give him $8 million worth of stock that he can’t sell for three years … and not a penny of salary.

Feinberg announced that 419 firms will be getting letters related to bonus pay for the top 25 executives at each firm. Feinberg, however, has no authority to demand those executives pay their bonuses back; he can only request that the banks work with him “renegotiate” their previous bonus payments. Although banks need not comply with his request, even some banks that returned to profitability in 2009 reformed their bonus structures or paid out less in response to public pressure. Thus, critics of executive compensation remain hopeful that Feinberg might be able to work out an arrangement with banks — particularly if they thought the bad publicity from refusing to comply would have a negative impact on their business. But with more than half of Republicans already under the impression that the banks had little to do with the recession and overall public anger slowly receding, it remains to be seen whether Feinberg’s mandatory investigation will actually result in any less money in executives’ retirement accounts.

Case in point: Wells Fargo CEO John Stumpf. His compensation for 2009 — if you count the bonus he got mid-year — will be around $24 million. Well Fargo’s profit for 2009, however, was $7.99 billion, far shy of Chase’s $11.7 billion or Goldman’s $13 billion profit last year. Unlike Chase and Goldman, Wells Fargo didn’t pay off its TARP money until the very end of 2009, just in time to free Stumpf from the strictures of executive compensation limits. And while Dimon and Blankfein didn’t get bonuses in 2008, Stumpf took home a cool $13.8 million on Wells Fargo’s $2.66 billion profit in that year, which was less than half of the profit seen under Dimon’s leadership at Chase in the same year.

Dash notes other executives that seem to be getting paid even as their companies continue to founder: Morgan Stanley CEO James Gorman is set to get $11 to 13 million for 2009, even though his company posted an annual loss. Bank of America’s highest-paid executive this year is Gregory Curl, who got $9.2 million in stock even as his employer was coming to a deal to avoid prosecution over the acquisition of Merrill Lynch that he led. And Visa’s now-former president, Hans Morris, took home $24 million just for retiring in 2009.

Obviously, there’s only so much begrudging one President can do.

The Swiss government bailed UBS out with a $5.6 billion investment, since recouped with a profit, but UBS failed to regain profitability in 2009. It did manage to post its first profit in more than a year in the first quarter of its fiscal year, due to a tax credit from the government.

In contrast to all the whining in the States among bankers subject to executive compensation caps because they’re still running off American taxpayers’ largesse, UBS doesn’t expect its bankers to write editorials threatening to quit because their failure to turn a profit doesn’t net them bonus pay.

• Goldman Sachs made $13 billion in 2009, after losing $780 million (after taxes) in 2008.
• Chase doubled its 2008 profits to $11.7 billion in 2009.
• Chase repaid its TARP money in full by July 2009.
• Goldman repaid its TARP money with a 23 percent profit by July 2009.
• Neither Dimon nor Blankfein took a bonus for 2008.
• For 2007, Dimon received a $28 million bonus that was not restricted to stock.
• For 2007, Blankfein received a $67.9 million bonus, including $26.8 million in cash and $41.1 million in restricted stock and stock options.
• J.P. Morgan Chase made a profit every quarter during and despite the financial crisis.
• Goldman’s stock doubled in value last year and its profits were at a record high.

So, what did the president say?

“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”

He does, however, view the amounts as shocking.

But who would have guessed! Our president doesn’t begrudge CEOs bonuses that are smaller than they were before the crisis, when their companies were hugely profitable and their TARP money had been repaid? What kind of socialist is he, anyway?

In a letter to Feinberg, Grassley, senior Republican on the Finance Committee, is wondering (1) why such a large payment should go to an employee at a company that would no longer exist without the government’s help, and (2) why severance payments would apply to someone who left the company on her own accord. Along with the details of the severance agreement, Grassley is asking for Kelly’s complete pay history while at AIG.

Based upon the information that I have, it is unclear to me why Ms. Kelly’s voluntary resignation ought to entitle her to a multi-million dollar windfall from a severance agreement entered into by a company receiving so much federal taxpayer support.  At 2010 salary levels, $2.8 million in severance amounts to almost six years of pay.  $3.8 million in severance would amount to almost eight years of pay. Regardless of whether her severance is $2.8 million or $3.8 million, this raises serious questions about whether you believe the payment meets “appropriate standards for executive compensation” at a TARP recipient like AIG.

That Ms. Kelly feels entitled to the cash even after AIG was bailed out to the tune of $182 billion goes a long way to explain the populist anger directed at Wall Street.

“Compensation practices at some banking organizations have led to misaligned incentives and excessive risk-taking, contributing to bank losses and financial instability,” Fed Chairman Ben Bernanke said in a statement announcing the moves. “The Federal Reserve is working to ensure that compensation packages appropriately tie rewards to longer-term performance and do not create undue risk for the firm or the financial system.”

A separate explanation provided by the Fed goes even further to justify the proposal, saying, in effect, that Wall Street executives can’t be trusted to limit risk-taking on their own.

Recent events have highlighted that inappropriate compensation practices can contribute to safety and soundness problems at banking organizations and to financial instability. Traditionally, banking organizations and supervisors relied on strong risk management, internal controls and corporate governance to help constrain risk-taking. However, the financial crisis has illustrated that the incentives created by poorly designed and implemented incentive compensation arrangements can be powerful enough to overcome risk controls.

The Fed’s plan is to monitor the pay structures of the nation’s banks in order to discourage excessive risk-taking by executives as well as lower-ranking employees, such as traders. The reviews will apply differently to the nation’s 28 largest institutions versus the smaller community banks, with the larger banks subject to more intensive scrutiny.

Federal Reserve Governor Daniel K. Tarullo said the proposal “is but one part of a broad program … to strengthen supervision of banks and bank holding companies in the wake of the financial crisis.”

It was the second wave of bad news to hit Wall Street in 24 hours. On Wednesday, the Obama administration announced plans to slash pay for the top 25 executives at the seven companies that received “exceptional” funding under the Wall Street bailout bill. The average compensation for those 175 executives will be halved, according to U.S. pay czar, Kenneth Feinberg.

Still, neither the administration’s nor the Fed’s limits would cap compensation at these firms, as proposed by some members of Congress earlier in the year. That means that executives at even those institutions propped up with billions of taxpayer dollars could still be in line for multi-million dollar pay packages. The Fed explains why it didn’t include caps:

[O]ne size does not fit all firms or employees. Best practices for balancing risk and rewards in incentive compensation programs continue to develop and are likely to evolve significantly in the coming years….

Further experience may reveal specific compensation practices that may appropriately be required or prohibited.

Cheronda Guyton, a senior vice president responsible for commercial foreclosed properties, broke company rules barring personal use of bank property, Wells Fargo said in a statement Monday.

The Times reported last week that Guyton had been spotted by neighbors spending time at the Malibu Colony home with her family this summer. At a party in August, guests were ferried to the beach house from a yacht, residents of the enclave said.

The property’s former owners were victims of convicted swindler Bernie Madoff’s Ponzi scheme, and lost the home as a result.

This story pretty much has everything you might look for if you’re trying to follow the foreclosure crisis. An expensive second home, taken back by the bank. Bernie Madoff. A top executive of a bailed-out bank capitalizing on someone else’s foreclosure mess. The yacht that brought guests to the party.

And now it has something else as well: Someone at the bank appears to have paid the price for unacceptable behavior. With top executives of companies bailed out by the taxpayers still raking in big paychecks, that’s  definitely something we haven’t seen much in this crisis. Too bad it had to take over-the-top behavior like partying in someone’s foreclosed house for that to finally happen.

“You don’t have to wait to use plain language in your dealings with consumers,” Obama said. “You don’t have to wait for legislation to put the 2009 bonuses of your senior executives up for a shareholder vote. You don’t have to wait for a law to overhaul your pay system so that folks are rewarded for long-term performance instead of short-term gains.”

Felix Salmon at Reuters particularly liked this explanation of the need for a Consumer Financial Protection Agency:

Consumers shouldn’t have to worry about loan contracts designed to be unintelligible, hidden fees attached to their mortgages, and financial penalties – whether through a credit card or debit card – that appear without warning on their statements. And responsible lenders, including community banks, doing the right thing shouldn’t have to worry about ruinous competition from unregulated competitors.

Opponents of such an agency argue that it will limit consumer choice and financial innovation, but Salmon says Obama countered that argument well in his speech, by arguing that in the past a lack of rules has meant “innovation of the wrong kind,” like the firm that could make its products look best by “doing the best job of hiding the real costs.”

For example, we had “teaser” rates on credit cards and mortgages that lured people in and then surprised them with big rate increases. By setting ground rules, we’ll increase the kind of competition that actually provides people better and greater choices, as companies compete to offer the best product, not the one that’s most complex or confusing.

Derek Thompson at The Atlantic, however, has a different take. Obama, he said, channelled his inner Jennifer Aniston in the speech.

I have an running observation about Obama, inspired by this article in The New Republic, that the president likes to remind audiences that he would prefer to tweak their incentives than have the government mandate reform. He and Treasury, you remember, wanted private investors to choose to buy the toxic assets. He continues to ask private insurers to choose preventative care, end underwriting and cut it out with rescission.

This instinct reminded me of a famous scene from Aniston’s movie The Break-Up, where her character famously tells her live-in boyfriend (Vince Vaughn), not that she wants to do the dishes for him; nor that she wants to force him to do the dishes: She wants him to want to do the dishes.

Reading Obama’s speech with my Rom-Com glasses on, the message is strikingly familiar. Obama doesn’t want to run Wall St. He wants Wall St. to re-learn how to run itself.

In the movie, Aniston’s wish for her boyfriend to want to do the dishes doesn’t exactly come true. Thompson isn’t sure Obama will fare any better.

I swear, it’s not just me watching too much TBS. Tim Fernholz remarks that “his call for financial sector players to act voluntarily in the public interest immediately rather than waiting for reform to pass” sounds like “health care tactics all over again.” It’s true! This is a very standard rhetorical tactic for Obama. Whether it works for him better than the threat worked for Aniston’s character, however, remains an open question.

And that’s the question that remains, as the Lehman anniversary passes, Obama heads back to Washington, and the fate of financial regulatory reform remains up in the air.

The financial markets are too important to the economy to be left to the markets alone. You need a strong framework of regulations, a much stronger framework than we had.

In Congress, Sen. Chris Dodd (D-Conn.), chairman of the Senate Banking Committee, and Rep. Barney Frank (D-Mass.), who heads the House Financial Services panel, are pushing for sweeping reforms of the finance industry this year, including the creation of a new agency designed to protect consumers from some of the more dubious practices of the banks.

With Congress already facing hugely contentious health reform and climate change bills this fall, however, the Democrats might not want to hold their breath for action this year.