Pay czar going after more companies
TEXT OF INTERVIEW
Bill Radke: Bailed-out bankers are about to get their paychecks scrutinized. The Obama Administration’s pay czar, Kenneth Feinberg, will send letters today to more than 400 firms that got government rescues. Now so far, Feinberg has been mostly focusing on a small group of companies that got the biggest bailouts. Well today, that field widens. Here’s Marketplace’s Brett Neely joining us live from our Washington bureau —
Good morning.
Brett Neely: Good morning, Bill.
Radke: Should bankers be scared, Brett? Can the pay czar make them give up their bonuses?
Neely: No — he doesn’t actually have the power to force bonuses to be repaid. But the review could reveal embarrassing pay details, and banks may just decide it’s in their interest to renegotiate bonuses rather than have Feinberg drag it all out in public.
Radke: OK, so they don’t have to give their money back. What can the government actually do here?
Neely: Well Goldman Sachs, JP Morgan Chase and as you mentioned, about 400 other companies are going to be required to share their pay information on the top 25 executives during the height of the financial crisis. So they’re going to have to turn that information over to the government.
Radke: And Brett, don’t banks say, they have been maintaining all along, they have to pay really well to keep their best people?
Neely: Sure. But Feinberg has some ammunition to counter that argument. He’s going to be releasing a study today on pay at companies he helped designed the pay system for after they were bailed out by the government. And it turns out 85 percent of the executives of those firms stayed on even after their pay was cut. So Feinberg is definitely going to wave those numbers in front of other bankers and say, listen, you know, you can pay less and people will stay.
Radke: OK. Marketplace’s Brett Neely in our Washington bureau. Thank you.
Neely: Thank you.
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