Dodd produced language that allowed ‘pay czar’ Feinberg to cut salaries


Remember all the heat Sen. Chris Dodd took earlier this year over writing the loophole in the stimulus that let AIG executives collect $165 million in bonuses?

But that same provision had another key section – the authority for a White House pay czar to slash top executive pay at seven financial firms that still hold billions in taxpayer bailout funds. So what Dodd’s legislation gave away in the form of bonuses, it has taken back with special pay master Kenneth Feinberg’s power over Wall Street salaries…

…In February, Dodd successfully added language to the Senate version of the stimulus that would have barred the 25 most highly paid employees at bailout firms from getting bonuses or incentive payments.

By the time the final bill headed for the president’s desk, Treasury had successfully prevailed upon Dodd to make the change that would ultimately allow the AIG bonuses to go through, citing concerns that they’d be sued for breaking existing contracts…

…“In this country, you are supposed to be rewarded for hard work,” Dodd said. “But for folks on Wall Street to be giving out outrageous compensation packages, in the middle of a recession, as they are being propped up by taxpayer dollars is obscene.”

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