Pay Czar C*ckblocked Over AIG Payments
Contracts? We don't need no stinking contracts.
U.S. pay czar Kenneth R. Feinberg cut compensation at American International Group Inc. by $28.4 million, but employment contracts will funnel additional pay to three top employees, according to a document released by the Treasury Department.
Direct compensation for AIG's top-paid 13 employees would fall $28.4 million to $31.4 million this year from 2008 under Mr. Feinberg's determination. His oversight applies to the 25 highest-paid employees at companies receiving extraordinary government aid; at AIG, 13 of these people have left the company.
The cut in compensation at AIG doesn't take into account additional payments three employees will get under what AIG called "legally binding rights under valid employment contracts," according to a document signed by the pay czar that was released by the Treasury Department on Thursday.
Contractually required retention bonuses paid to AIG's Financial Products employees led to widespread public anger earlier this year, and the Treasury document suggests that those or similar contracts led to complicated discussions as pay cuts were negotiated.
The pay czar's office renegotiated retention bonuses for six of the seven companies that received large amounts of money from the Troubled Asset Relief Program, or TARP -- the exceptions are the contracts covering three AIG employees, the document said.
The three AIG employees are due "substantial cash payments in 2009" that were allowed to stand after "discussions with AIG officials did not lead to an agreed upon restructuring of these 'retention' awards," the document said.
Hey shouldn't someone be regulating this?!