The US Treasury Department has selected Patricia Geoghegan to replace Kenneth Feinberg as the “pay czar” overseeing compensation at companies bailed out by the government.
The pay czar office was established during the financial crisis to ensure that bailed-out companies were not using taxpayer money to pay out excessive bonuses.
Feinberg, an arbitration lawyer known for his handling of the Sept. 11 Victim Compensation Fund, became pay czar in June last year.
Geoghegan, who has been working with the pay czar office for about a year, will oversee the pay practices at American International Group Inc, General Motors Co, Chrysler Group LLC and Ally Financial, according to the US Treasury Department.
Originally, the office oversaw seven companies, but institutions such as Bank of America and Citigroup were released from its jurisdiction after repaying taxpayer money.
Feinberg was tapped earlier this summer by US President Barack Obama’s administration to administer BP Plc’s US$20 billion oil spill fund.
Prior to joining Treasury, Geoghegan, 63, spent most of her career in private practice. She worked for the law firm of Cravath, Swaine and Moore LLP in New York for 33 years.
The pay czar’s office has taken fire from both sides as some critics charged it did not do enough to curb pay while the companies under its control chafed at times under the scrutiny, arguing it hobbled them against private sector competitors not subject to similar restraints.
On Friday, Feinberg issued a final report and acknowledged this tension while calling the effort a success.
“It is my personal belief that this office made an important contribution to the highly-charged subject of executive compensation,” he wrote. “It remains to be seen whether our work will have a lasting impact. Only time will tell.”
Separately, new General Motors chief executive officer Daniel Akerson will get up to US$9 million in salary and stock, the same pay package granted to his predecessor, Ed Whitacre.
Akerson, a former telecommunications industry and private equity executive, will receive US$1.7 million in annual salary, US$5.3 million in short-term stock payable over the next three years and another US$2 million in stock that is part of the company’s long-term executive compensation plan.
The automaker, which is 60.8 percent owned by the US federal government, disclosed the pay package in a filing on Friday with the Securities and Exchange Commission. The filing said Akerson agreed to the pay package after Feinberg approved it on Wednesday.
Akerson, General Motor’s fourth chief executive in less than two years, took over leadership of the company on Sept. 1.
Whitacre, chief executive since December last year, said he stepped down because the company needed an executive who would be in charge long after it sells stock to the public. The sale, called an initial public offering, is expected in mid-November.
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