The Treasury Department's pay czar said Friday that 17 banks gave their top executives $1.6 billion in lavish payments while they were receiving billions of dollars in taxpayer-funded bailouts.
Kenneth Feinberg said he did not have the authority to ask the firms to repay the money that was handed out during the financial crisis. But he said they should develop new rules on compensation that would allow them to slash compensation payments in future crises.
"If the company's board of directors has identified that the firm is in a crisis situation, the compensation committee would have the authority to restructure, reduce or cancel pending payments to executives," according to a fact sheet Feinberg released.
Feinberg reviewed 419 companies that received bailout money before pay curbs were enacted by Congress in February 2009.
The review covered the period from October 2008 to February 2009. The starting point was when banks began receiving bailout money from the $700 billion Troubled Asset Relief Program. The ending point was when Congress enacted pay curbs on institutions receiving government support.
He determined that a total of $1.7 billion in payments were made during that period that would have violated the guidelines adopted later. And $1.6 billion of that amount was paid out by 17 of the country's largest financial institutions.