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3) Incredible Expanding TARP CEO Pay
"We've got to make sure that none of that money is going to pad CEO bank accounts or to promote golden parachutes."
Reining in excessive CEO compensation was one of the most melodious rallying cries of the Obama campaign and of the early days of the Obama administration. And there was no more logical place to start than with the CEOs of firms that were getting broad-daylight public assistance via the TARP. The president even created an office of the Pay Czar – er, "Special Master for TARP executive compensation" – to deal with this problem.
How did it work out? CNN reported earlier this year:
[A] watchdog over the $700 billion Troubled Asset Relief Program found that the special pay czar Kenneth Feinberg -- whose job it was to cut pay -- failed to "effectively" rein in executive compensation.
In a report released Tuesday, the Deputy Special Inspector General for TARP Christy Romero doesn't blame Feinberg. Instead, she blames pressure from those banks -- and from the Treasury Department -- aimed at keeping the CEOs in their jobs, which was thought to be the best way to get banks to repay the bailout quickly.
Companies pressured him to let the companies pay executives enough to keep them from quitting, and Treasury officials pressured him to let the companies pay executives enough to keep the companies competitive and on track to repay TARP funds," the report said.
Feinberg tried to shift CEO pay away from large cash salaries and toward stock tied to company performance. But he still approved multimillion-dollar compensation packages for many of the top 25 bank CEOs, the report said.
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