The government’s pay czar Kenneth Feinberg issued the new pay restrictions for the top employees of bailout recepients. The ruling will affect 75 of the 100 top employees of Citigroup, AIG, General Motors and GMAC.

The ruling will prevent execs from receiving more than $500,000 base salary. At least half would come in form of company stock and the rest in cash.

“We want to minimize these runaway perks and other compensation practices,” Feinberg said.

A close monitoring of salaries and bonuses was instituted after AIG made a scandal releasing millions of dollars in bonuses to its financial division despite receiving bailout money.

Bank of America is set to repay the $45 billion it owes taxpayers – bail-out money that it received from the US government – in the next few days.

A great motivation for bank officials to repay the government as soon as possible is to free themselves from restrictions such as the salary and bonus caps.

AIG sparked a huge controversy after handing out millions in bonuses despite receiving bailout money from the government. This prompted the administration to put a cap on compenstaion of executives of companies bailed out by the government.

The bank will be using its available cash and securities to put up the money needed to repay the taxpayers. It received a $1 billion net loss from July to September.

Source: BBC

If you’re a US taxpayer who lost a job and or a home, the last thing you’d really want to read about is how much these bank execs are getting in salaries and bonuses because, practically, that’s your money.

So why the heck are these banks and executives still handing out damned bonuses for their people. The AIG bonus hoopla should’ve been enough to slap some consciousness into these people.

A record $140 billion in salary and bonuses have been allocated by big US banks and most of that comes from the bailout funds from tax dollars. Bank of America’s Ken Lewis was handed out a $1.5 million salary but Kenneth Feinberg, the Treasury department’s pay czar, wants it back.

And these bank bosses will tell you that they’re contractual obligations and that they’re entitled to it. Yeah. Like jobless and homeless Average Joe’s entitled to his plight.

While these figures combined are still lower compared to the $117.5 billion given to insurance giant AIG and the collective $200 billion given to the largest banks, the figures have shown that the bailouts for Freddie and Fannie have gone way beyond the estimates.

A comment by TARP overseer Neil Barofsky created an uproar prompting people to wonder how much will the government actually be spending to bail the economy out. Barofsky, the special inspector general for TARP, said that the whole bailout might leave taxpayers $23.7 trillion in the hole.

This gave reason to critics to blast the government’s efforts. Still, the Treasury Department argued back that this number was overblown. Barofsky clarified this, stating that the actual amount outstanding at this point in time is closer to $3 trillion. The larger figure assumes that the rescue program goes the full nine and suffers total losses.

Source: CNN

AIG allegedly asked the government-appointed in-charge Kenneth Feinberg to weigh in on the matter. AIG doesn’t technically need the government’s permission but after the scandal it created after previously shelling out millions in bonuses.

“Any time we write a check to anybody” it is highly scrutinized. We would want to feel comfortable that the government is comfortable with what we are doing,” an AIG official told the Post, speaking on condition of anonymity.

AIG sparked taxpayer outrage after it handed out millions in bonuses last March despite being kept afloat by the billions in bailout money. AIG argues that these do not fall under the governments’ jurisdiction since these were bonuses committed from last year.

One can say that some people just have no shame. No one wants to hear anyone receiving millions while every other tax payer’s job is being cut and every other household losing its home due to the crisis.

Source: CNN