Obama's Pay Czar Poised to Set New Compensation Caps

Decisions due on 2010 pay packages for top employees at five firms.

ByABC News
March 17, 2010, 10:47 AM

March 17, 2010 — -- Next week the Obama administration official in charge of setting pay at five bailed-out companies is expected to issue his new rulings for this year's compensation packages.

Ken Feinberg, the Treasury Department's special master for executive compensation, is set to unveil his decisions on the 2010 pay packages for the top 25 highest-paid employees at five companies receiving "exceptional" help from taxpayers: AIG, General Motors, GMAC, Chrysler, and Chrysler Financial.

Feinberg is likely to limit this year's base cash salaries for three employees in AIG's Financial Products unit to under $200,000, a person familiar with the matter told ABC News. The move would freeze the 2010 base cash salaries for the three AIG Financial Products employees at last year's levels after the employees earlier this year accepted retention payments, the source said.

This would mark the second year in a row that Feinberg has made such a ruling after the Financial Products unit played a pivotal role in AIG's downfall by making massive, risky and losing bets.

In recent weeks Feinberg has also insisted that the insurance giant fulfill its pledge to return $45 million in payments from last year. AIG was able to keep its promise in part by cutting payments to former employees, the source said.

Neither Feinberg nor AIG had any comment.