Pressure from financial institutions and Treasury officials undermined an effort to limit executive pay at seven companies rescued with taxpayer money, a new government audit showed on Tuesday. The official overseeing executive pay for bailout firms limited cash compensation and made some reductions in pay, but still approved compensation packages in the millions, the TARP (Troubled Asset Relief Program) inspector general said in the report. Former U.S. pay czar Kenneth Feinberg approved pay packages worth $5 million or more from 2009 to 2011 for 49 top earners, the report said.
1. What was the significant leverage that the article said the companies had over Feinberg? Do you agree that this would be significant enough to compromise? Why or why not?
2. What was Feinberg’s title? What does TARP stand for?
3. Who were the companies involved? Which of these have exited the TARP program?
Reuters Staff. (2012). Bailed-out Companies Pressured TARP Pay Czar to Keep Executive Pay High: Report, Jan. 24 (Retrievable online at http://www.huffingtonpost.com/2012/01/24/tarp-executive-pay_n_1226485.html?ref=business)