Bank of America dodges a bullet
Days after the nation's largest lender repaid its TARP money, the government's pay czar will unveil another round of curbs for top employees at bailed out companies.
NEW YORK (CNNMoney.com) -- The Obama administration's pay czar will outline Friday another round of curbs on executive compensation for companies that took exceptional assistance from the government, but Bank of America won't be one of them.
BofA had been one of the seven companies under the purview of Kenneth Feinberg, the Treasury Department's special master for executive compensation, who is charged with determining appropriate pay packages for the top 100 employees at the most heavily bailed out companies.
But the nation's largest lender announced Wednesday that it had sent a check to the government to repay the $45 billion in aid it had received from the Troubled Asset Relief Program (TARP).
A Treasury Department official confirmed Thursday that BofA is no longer subject to the special master's authority.
In October, the pay czar cut total compensation for the top 25 executives at the seven firms by about half, scaling back salaries by 90% and transferring bonus payments into performance-based, longer-term stock options.
On Friday, Feinberg will present his determinations for the pay structures of the next 75.
Since most executives take home a majority of their annual pay in the form of end-of-year bonus checks, adjusting pay packages so late in the year will likely have a sizeable impact on employees' 2009 pay. And as executives get their pay trimmed, the affected companies are raising concerns that top talent will walk out the door.
Some of the firms have said they are already on the brink and can't afford to lose their key employees. That's something Feinberg says he is acutely aware of.