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Pay Czar Feinberg Had Input On Blankfein's 9 Million Bonus, No Determination On Thain's CIT Package
A Bloomberg Television interview with Ken Feinberg discloses that the Pay Czar believes the Goldman CEO's compensation is still excessive. "If you look at the 700 people that are under my mandatory jurisdiction I do not believe there is more than one or two in the total of 700 that are making that type of total compensation." Yet Feinberg is happy that Lloyd has received the bulk of his comp in slow-vesting stock. More curiously, Feinberg was in fact consulted when determining Blankfein's bonus package - this is odd as Goldman's has repeated its belief that since it has paid back TARP, but not TALF, it is its own bonus master. Is Goldman so terrified of the Administration's PR onslaught that no matter what it wanted to make sure a bonus announcement wouldn't be followed up by the Teleprompter In Chief immediately firing back with some more fire and brimstone? Also, presumably Lloyd's upward pension plan value increase by $91 million is secondary news.
Full interview and key notes below:
Feinberg on whether he was consulted about CIT Group and John Thain's pay package:
"Not at all.CIT is not part of my mandatory jurisdiction.The good news is that these private companies - CIT, Goldman, JP Morgan etc - they seem to be following the prescriptions I've laid out for the companies within my jurisdiction: relatively modest, base cash salaries and any upside is in the form of stock, not cash, so that the total value of compensation of an individual is tied to the overall performance of the company over the long term. That is all very, very good. The problem remains the high total compensation which is very much in excess of what we're doing at the Treasury in keeping total compensation much more modest."
Feinberg on whether Goldman CEO Blankfein's $9M compensation is excessive:
"Yes I think it is [in excess]. If you look at the 700 people that are under my mandatory jurisdiction I do not believe there is more than one or two in the total of 700 that are making that type of total compensation. On the other hand, clearly Goldman is following the prescriptions I've laid out. Mr. Lloyd Blankfein is getting a very low base cash salary. His total comp is again tied up in long term stock, the value of which cannot be determined or transferred for about five years. That is the type of compensation we're looking for, where value is tied to the total performance of the company itself."
Feinberg on what would be a more reasonable scenario for Blankfein's pay:
"I can't speak to the culture and what is going on inside these companies. They are not really part of my jurisdiction. I like the mix of stock and low cash. The overall compensation again points out the necessity of doing something with the total compensation. The administration has proposed various approaches, the Volcker approach, a bank fee approach - I cannot really get to the total compensation but I am pleased at the prescription and that we're not talking about guaranteed cash, which is something that is prohibited to those companies that are under my watch."
Feinberg on whether Goldman and CEO Blankfein consulted with him on pay:
"Yes, [we] had a number of conversations. What the Treasury has recommended in terms of structuring, and size, I would like to think we had some influence on what Mr. Lloyd Blankfein finally decided."
Feinberg on what influence he may have had over Goldman:
"Clearly, low cash base - I think Mr. Blankfein is getting under $600,000-Mr. Lloyd Blankfein is getting under that amount. His entire bonus, no cash, long-term stock, they cannot be transferred for I think five years. So that his ultimate package value will be determined by Goldman's ultimate success over the long haul."
Feinberg on the nature of his conversations with Blankfein:
"You will have to ask Mr. Blankfein. It was not about the package, but really about how Goldman as an institution should approach base salaries and compensation over time. He clearly was concerned, wanted to abide by what Treasury is doing and largely I think he has succeeded in adopting the prescriptions."
Feinberg on whether these compensation changes are permanent:
"We will have to see. The Deputy Secretary of the Treasury pointed out a few months ago that these steps the banks are taking voluntarily is constructive - a small step. Whether or not it will be permanent, whether or not over a long period of time these prescriptions will stay in place [remains to be seen]. I know that Secretary Geithner is also looking to corporate governance reform, shareholder rights, regulatory reform, this is one part of a larger menu of prescriptions."
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yet Pelosi's spending as she galavants about the world at the taxpayers expense is ok?
Oh boo! A slow day for Llyod at Dr. Frankenstein's Financial Engineering Castle of Horrors. Last year he got? His pension etc., went? And not to worry, he'll calc the DPV against that missed payment (a PIK of sorts?) next time around.
After all, do really gotta fall on your sword for DC after encroaching on their turf. They are the ones who do God's work. You only pay for their cathedrals. Push the chill button like a [insert reprimand]
And remember, the first rule of Fight Club is...
Will this PayCzar go after the bonus paid to CEO's at Fannie and Freddie, GMAC, GE and other government favorite children? I'm not holding breath for that.
Taibbi on Thain
Man, exactly what do you have to do to become unhirable in this country? Eat Christian babies on CNN?
http://trueslant.com/matttaibbi/2010/02/08/another-wall-streer-retread-r...
chutzpah..remember this is a word with a positive connotation.
–noun Slang.
1. unmitigated effrontery or impudence; gall. 2.
audacity; nerve.
Obama Administration: When you begin to put a freeze on their bank accounts, get back to me.
For a government that is a tissue of lies and Goldman czars, who knows if they even follow through on these reductions? That said, is Czar Feinberg a piece of work or what?
I am unconvinced that this wasn't GS's plan all along, possibly as a tactic to boost the credibility and/or cachet of the administration in the public's eyes.
Why should be believe any of them? Besides, as far as pay goes, why should we think the best financial engineers in the world can't find a way to hide someones pay? They have released enough information to feed both sides of the political spectrum's contempt for the other - which is exactly what they want. We continue to argue and fight, while the rip-off continues.
Think for yourselves, as whoever you are and whatever you earn:
They are directing the proletariat as a virtual lynch mob against the bourgeoisie... This all sounds very populist and very bad for the rule of law.
somebody appears to have missed last week's memo that the dow is NOT to fall below 10,000. i heard there is a place though where they can print things very quickly and get them out to wall street before something bad happens
Not exactly. Feinberg spoke to Axelrod, Ram emmanuel, Summers, Orszag, shapiro, Neil barofsky, cass sumstein. They then decied Blankfeins pay. Hey what happened to separation of church and state? Anyone? bueller? Anyone?
What's with the teleprompter in chief jokes? It's like Americans are only happy with their leaders when they can't read. Eight years of semi-retardation wasn't enough for you? There's lots of reasons not to like this President. This is not one. I expect better from ZH.
The past several administrations might be best enshrined by the French term "Ennui", loosely translating to; "The frog's legs must have been off."
$500,000 in base salary and $5.5 mil. in restricted stocks after running one company into the ground and successfully pawning it off on another company. Wow! Where can I find a job like that? I can't wait to see how much he'll charge to the company/stockholders to redecorate his office... is it any wonder why Wall Street is despised by Main Street?
I just cannot see how Feinberg, Geithner and Bernanke can fit their heads up Blankfein's ass at the same time. This guy must be huge.