Feinberg Will Not Ask Executives to Return Bonuses

Are executives of 17 bailed-out banks, exempt now from having to settle $1.6 billion for pay packages received during the financial crisis, feeling shame? The Obama White House special master for compensation, Kenneth Feinberg, would like the American people to believe so. More likely, the executives must be feeling particularly auspicious. On July 23, Feinberg excused them from the financial hot seat.

Considering his earlier hard sell about these companies and the rewards their executives reaped -- companies that public money helped to salvage -- does Feinberg's decision to let ride billions of dollars in extreme bonuses add insult to injury?

Feinberg's line of reasoning concludes the pay packages to be legal. No rules were broken. He brushes past this with the blasé observation that these companies made a bad judgment. He classifies their gargantuan perks as "ill-advised" actions.

Bad judgment is what Olympic gold medalist Michael Phelps displayed when he was unknowingly photographed smoking from a water bong. Rewarding executives with billions of dollars following a bailout is almost certainly beyond the intellectual capacity of the hardworking people of the U.S. to fathom. Not even coming close to being lumped in the "bad judgment" category, it rather smacks of the same old greed and blatant disregard to the muck and mire the banking industry was wading through in the first place.

Millions of people in the United States are out-of-work and just a step away from the bread line. Feinberg's choice to let the executives walk away with enormous Wall Street pay bonuses is not sitting well with the public.

Regardless that the pay packages are legal, it is easy to imagine the public viewing this development as an ethical issue. Wall Street executives helped themselves to $1.6 billion after the country came to their aid. Kenneth Feinberg closed his eyes as well.

Of course, a candid approach would be that a bailout was in all probability, inevitable. It seems many thought there would be a crack down on corporate wrongdoing as well. However, it mattered not that Goldman Sachs Group Inc. was apparently operating under improper methods -- Goldman Sachs was in on the bailout, and one of the extreme pay companies Feinberg chose to disregard, according to an AP report.

Feinberg's refusal to take the financial firms to task is really just another perk served up executive-banker style. What is the lesson in fouling up a company through bad lending practices and collusion to carry out improper operating methods, only to be rescued in the end by public money?

There is no lesson. Yet, it is something Feinberg apparently could not or would not challenge -- letting rewards worth $1.6 billion to executives stand. Feinberg's unsettling decision may open a Pandora's Box of troubling scenarios with financial firms in the future. Count out even an ounce of public support, should the bankers ever need help again. The stage has been set.

This recent incident may sway the public's faith on how Kenneth Feinberg will handle his newly appointed post in the Gulf. Moving on from Wall Street, Feinberg is charged with sorting out who gets what compensation from the BP oil disaster fund.

With his refusal to ask financial firms to return the hefty payouts, it appears final that Kenneth Feinberg closed the door for good on the Wall Street subject. If not, he would have tabled the investigation until after the BP matter is concluded. The public deserves more of his attention to the Wall Street fiasco.

Sources:

"Has the Wall Street Czar Paid Off? - http://curiouscapitalist.blogs.time.com/2010/07/23/feinberg-finds-1-6-billion-in-inappropriate-payouts-has-the-wall-street-pay-czar-paid-off/

AP Article by Daniel Wagner - http://www.inyork.com/ci_15590716?source=most_viewed

Time Article - http://www.time.com/time/nation/article/0,8599,1903547,00.html

RAW - http://rawstory.com/rs/2010/0723/17-financial-firms-gave-illadvised-bonuses-pay-czar/