Only 16 Executives Changed Companies After Pay Caps
After months of whining, a resignation letter delivered on the op-ed page of The New York Times and warnings of a massive corporate brain drain, only 16 executives have left bailed-out companies amid pay caps in the past two years. Pay Czar Kenneth Feinberg set pay rates for a grand total of 104 super-rich guys in that time, but — despite the hue and cry — the vast majority of them stayed at their companies even as they pointed to massive external competition for their services.
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.