Kenneth Feinberg, who ran the government's fund for families of the victims of the Sept. 11, 2001, terrorist attacks, has 60 days to approve or reject the compensation plans submitted this week from bailout recipients. They include American International Group Inc. and General Motors.
He is expected to complete his review by late October, although Treasury spokesman Andrew Williams said Friday that the 60-day clock will not start until Feinberg makes a determination that a company's submission is "substantially complete." He said it could take some days, if not weeks, for Feinberg to make that determination for each of the seven companies.
Friday was the last day the companies could submit proposed pay packages for their 25 highest earners. Feinberg is expected to negotiate the packages with the companies and also will approve broader compensation formulas that will apply to the 75 next-highest-paid workers at each company.
Feinberg will have a difficult balancing act. He faces pressure to curb diamond-studded compensation packages that have led to public outrage. At the same time, he must ensure that financial institutions and car companies can keep talented executives needed to steer them clear of government assistance.
Free market advocates, meanwhile, fault the government's role in overseeing the private compensation.
"In our country's heritage, we do not look kindly on the federal government insinuating itself into the private marketplace and micromanaging these companies," Feinberg told National Public Radio in June. "On the other hand, there's this populist sentiment today that there was excessive compensation paid to high-level company officials."
Compensation experts say Feinberg probably will seek changes that would align pay packages with executives' performance.
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