When Treasury Department pay czar Kenneth Feinberg cut executive compensation at seven companies that accepted bailout money, a collective groan rose from Wall Street. Surprisingly, it wasn’t ignored. Instead, Feinberg revisited the issue and decided to increase base salaries for execs at those companies. As a result, average salaries rose to $437,896, up 14 percent from last year. The move was largely seen as an effort to help these seven companies retain their top brass, though not everyone is buying what Feinberg is selling. “I don’t think it’s a good thing,” one analyst told the Wall Street Journal. “Politically, it’s odd. In terms of messaging, it’s odd. From a business perspective, I prefer to align compensation with performance objectives and not a fixed rate.”
Meanwhile, Feinberg is stuck trying to please both the populists who want to see companies punished for their misdeeds and the executives at those companies, who could easily bolt for higher paying jobs. Because in the bizarro world that Wall Street executives call reality, $437,896 just isn’t that much money.
