President Obama's pay czar says recent changes in compensation practices at Goldman Sachs are a "good sign" that his efforts to reform Wall Street could be taking hold.
“It is a recognition that some of my prescriptions and rules will be adopted in whole or in part by Wall Street,” the Treasury Department's Kenneth Feinberg told Here & Now host Robin Young in an interview Tuesday.
Goldmans’ new policies, which include eliminating cash bonuses this year and tying stock options to the company’s performance over five years, are similar to the mandates Feinberg set out for many of the employees at bailed-out banks.
“These are steps, I think, that are important precedents, that hopefully will be used by companies that are not subject to my mandatory jurisdiction," said Feinberg, whose formal title is special master for TARP executive compensation.
Feinberg will lose his direct authority over banks once they have repaid the money they received from the federal government through the Troubled Asset Relief Program. He acknowledges concerns that those banks could then return to their reckless practices, but notes that he will retain an advisory authority.
That role, Feinberg said, will allow him to "issue rulings, which although not mandatory, will have the force of Treasury behind them and hopefully will act as a deterrent to risky, excessive compensation practices."
This program aired on December 15, 2009. The audio for this program is not available.