There have been rumors all week that something interesting is coming tomorrow from Kenneth Feinberg, who steps down as the so-called Pay Czar next month (because the president put him in charge of BP’s $20 billion compensation fund).
Thanks to the Journal‘s Deborah Solomon, we know a little more about Friday’s surprise, and it might be relatively awesome.
The bad news, depending on your perspective, is that before he leaves his post Mr. Feinberg can’t force the nation’s banks to repay all the compensation that was doled out during the short 2008 period when banks were getting billions of TARP money without any executive-pay restrictions attached.
What he can do, though, is tell everyone about who was getting what back then.
After looking at the past compensation practices at 419 government-assisted financial firms, including Morgan Stanley, JP Morgan and Goldman, his report may detail the fortunes that were handed out to top executives back during the peak of the international financial crisis. That, explains the Journal, is “potentially embarrassing.”
And even if he can’t demand the TARP-era money back, he can try to renegotiate past payments that are now considered to be against the public interest. Probably more importantly, he will also try to get Wall Street firms to voluntarily limit enormous pay during future crises.
Update: And so just how terrible was it? Not very. Mr. Feinberg named 17 firms that made the “ill advised” payments (including AIG, American Express, Bank of America, CIT, Citi, Goldman Sachs, Morgan Stanley, JP Morgan, and Wells Fargo), and then said it would be unfair to ask for the money back.