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To Claw Back Or Not to Claw Back - That's the Question

Kenneth Feinberg, the Obama administration's pay czar, said on Sunday he has broad and "binding" authority over executive compensation, including the ability to "claw back"...
August 18, 2009

Kenneth Feinberg, the Obama administration's pay czar, said on Sunday he has broad and "binding" authority over executive compensation, including the ability to "claw back" money already paid, and he is weighing how and whether to use that power. Congress granted the broad power to go after compensation for top executives from any company that received money from the U.S. Treasury's Troubled Asset Relief Program (TARP).

Feinberg has been consulting with seven companies that have yet to pay back money they borrowed from the government, including Citi, American International Group Inc., Bank of America Corp., Chrysler Financial, Chrysler Group LLC, General Motors Co. and GMAC Inc. Those companies faced a deadline of Friday to submit proposals to Feinberg figures for their top 25 employees.

"I have the discretion, conferred upon by Congress, to attempt to recover compensation that has already been paid to executives not only in these companies, but in any company that received federal assistance," Feinberg said during his remarks at a public forum in Martha's Vineyard, Massachusetts, part of a newsmaker series hosted by the Martha's Vineyard Times newspaper. "my determination will be final," Feinberg said. "The officials can't run to the Secretary of Treasury. The officials can't run to the court house or a local court. My decision is final on those individuals," he said.

U.S. Pay Czar Weighs "Claw Backs" (Reuters 8/17/09)