Sunday, January 3, 2010

What’s a Bailed-Out Banker Really Worth?

Last August, as midnight approached on a Friday, two Treasury Department staff members sat in a cramped basement office in the Treasury Building next to the White House and watched as their e-mail in-boxes filled up. The aides worked for Kenneth Feinberg, the government's special master for executive compensation, and they were awaiting submissions from companies that had received (and not yet paid back) billions in what federal regulations call "exceptional assistance" from the government's Troubled Asset Relief Program, or TARP. The government had the authority to set compensation levels at those seven TARP recipients, and this was the companies' opportunity to plead for salaries and bonuses for each of its top 25 executives. Chrysler Financial and General Motors submitted their proposals — about 2,000-plus pages each — a few days before. Now, like college kids crashing a term paper, the other five — A.I.G., Bank of America, Chrysler, Citigroup and General Motors Acceptance Corporation — were frantically trying to get their pitches into Treasury's digital in-box by the Aug. 14 deadline.

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