Earlier this month, the administration appointed a new "pay czar" to oversee compensation at companies that have been propped up by the TARP -- namely, AIG, Citigroup, Bank of America, GM, Chrysler and GMAC. But while czar Kenneth Feinberg has been tasked with supervising compensation for the top 100 employees at the companies, he won't be looking at compensation for the thousands of other employees. And so the New York Times reports today that Citigroup, in a bid to stop employees from leaving, plans to boost salaries across the company, sometimes by as much as 50 percent. The Times points out that it seems part of a general trend on Wall Street toward boosting salaries in order to shift attention away from bonuses.
However much the attention shifts, pay remains high, reports the Times: "industrywide, total compensation is expected to rise 20 to 30 percent this year, approximately to the levels of 2005, before the crisis, according to Johnson Associates, a compensation consulting firm. Total industry pay would still be below the record levels of 2007, but only a bit."
Other links this morning:
U.S. Judge Rejects GM Bondholder Group Plea (WaPo)
Reform of Regulation Has to Start by Altering Incentives (FT)
Lawmakers Tussle Over Mozilo Probe (WSJ)