"The taxpayers are in deep with these seven companies, and one of my primary obligations is to see to it that the taxpayers' dollars are returned to the U.S. Treasury," said Kenneth Feinberg, the special master for executive compensation under the $700 billion Troubled Asset Relief Program, or TARP.
He said he does "not accept as a priority" that the government should be vindictive or punitive about executive compensation, but he acknowledged that Americans are upset about huge bonuses and salaries at companies that received bailouts.
"I'm extremely sensitive to the public outrage about this," he said.
The "real challenge" in setting pay limits, he said, was to balance the fact that the seven companies owe the taxpayers billions of dollars with the proposition that they should not reward excessive risk in getting that money back.
The aim, he said, was to "make sure that key people stay on the job in order to get that money back."
Feinberg released his rulings on the pay packages for the five senior executives and 20 highest-paid employees at the companies receiving "exceptional government assistance." They are American International Group Inc., Citigroup Inc., Bank of America Corp., General Motors Co., Chrysler and the automakers' financing arms, GMAC and Chrysler Financial. Altogether, they have received $240 billion, or more than half, of the TARP money invested.
Feinberg also encouraged Wall Street to follow his lead voluntarily and structure its pay to reduce risk-taking, though he acknowledged he has no authority to force them.
"I personally believe that it's a lost opportunity for a broader marketplace not to take advantage of what we've learned in this process," he said, but he pointed out that his jurisdiction "begins and ends with these seven companies."
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