Feinberg to Look Back at (But Not Claw Back) Bank Bonuses
Now that there are only a few banks left that haven’t repaid their TARP funds — and many did so to get out from under Pay Czar Ken Feinberg’s pay-restricting thumb — and bonus season has passed, Feinberg has just a little time on his hands. The Wall Street Journal reports that he’s going to use it to look back at bonuses paid to bailed-out bank executives before February 2009, when executive compensation limits went into effect and Congress required that the person in his position examine those bonuses.
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.