Report Slams Treasury for Excessive Compensation at AIG and GM
In January of 2012, SIGTARP found that from 2009 to 2011, “the Special Master could not rein in excessive compensation at the seven companies that received exceptional TARP assistance because he was under the constraint that his most important goal was to get the companies to repay TARP.”
At the time, the person in charge was Kenneth Feinberg, who was worried that if compensations slipped, then top talent would leave the affected companies. Without the right talent and leadership, companies that received massive TARP bailouts like AIG (NYSE:AIG) and General Motors (NYSE:GM) would not be able to turn themselves around, pay back the Treasury, and remove themselves from government assistance.
“SIGTARP reported that despite reducing some pay, OSM approved pay packages worth $5 million or more for 49 individuals,” reads the report. This was far removed from guidelines that called for total compensation to target the “50th percentile for similarly situated employees at similarly situated entities and that cash salaries should not exceed $500,000, except for good cause.”
Having issued a report on its findings for 2009 through 2011, SIGTARP went ahead and investigated compensation in 2012, and found that the Treasury had once again “failed to reign in excessive pay.”