Kenneth Feinberg, America’s Pay Czar, said that he was concerned that his compensation restrictions were driving away key workers at bailed-out companies, a day after American International Group’s (AIG) chief executive was reportedly considering resigning over the issue.
Robert Benmosche, who joined AIG in August, wrote to staff yesterday to assure them that he was committed to the troubled insurer, after the Wall Street Journal reported that he could quit over pay cuts put in place by Kenneth Feinberg, the White House’s Special Master for Executive Compensation.
Mr Feinberg sets compensation limits for the most expensive employees at seven companies including AIG that received the largest taxpayer bailouts during the financial crisis.
Last month he ordered cuts of 50 per cent on average for the top 25 executives at the seven companies.
Speaking at a Bloomberg event, Mr Feinberg, who is nicknamed the Pay Czar, said that he was “very cognizant of the concerns expressed by these companies” that his restrictions would prompt workers to leave.
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“The law makes it clear that the determinations I render are designed, first and foremost, to make sure those companies thrive and that taxpayers get their money back,” he said.
He added that AIG, which is 80 per cent Government-owned, may not be able to repay the whole $83.6 billion it owes taxpayers but that if the company repaid even a part of the debt it meant that “we’re doing our job”.
AIG and Bank of America protested the severity of the compensation caps in meetings with Mr Feinberg but none of the seven have filed a formal appeal against his findings, he said.
Mr Feinberg told the Bloomberg event that the concerns expressed by the companies “certainly carry great weight with me”.