Top employees leave financial firms ahead of pay cuts
The administration had tasked Kenneth Feinberg, the Treasury Department’s special master on compensation, to evaluate the pay packages of 25 of the most highly compensated executives at each of seven firms receiving exceptionally large amounts of taxpayer assistance.
Many executives were driven away by the uncertainty of working for companies closely overseen by Washington, opting instead for firms not under the microscope, including competitors that have already returned the bailout funds to the government, according to executives and supervisors at the companies.
« There’s no question people have left because of uncertainty of our ability to pay, » said an executive at one of the affected firms. « It’s a highly competitive market out there. »
At Bank of America, for instance, only 14 of the 25 highly paid executives remained by the time Feinberg announced his decision. At American International Group, only 13 people of the top 25 were still on hand for Feinberg’s decision.
On Wall Street, reaction to Feinberg’s ruling was swift, with some executives arguing that it will further handicap the most troubled firms by driving away top employees while making companies unwilling to promote rising stars for fear of bringing them to Feinberg’s attention.