Wall Street faces double pay blow

Source: The Guardian US
• 'Pay tsar' to cap salaries at $500,000 at bailed-out firms
• Fed to tackle rewards for 'imprudent risks'
Andrew Clark in New York guardian.co.uk, Thursday 22 October 2009 22.39 BST

Leading US banks will be subject to a dual crackdown on multimillion dollar pay packets, as the Federal Reserve set out broad plans to scrutinise remuneration and the Obama administration's so-called "pay tsar" confirmed that salaries will be slashed at institutions receiving government aid.

In a coordinated response to public fury over Wall Street's swift return to large bonuses, the Fed announced that 28 of America's largest, most complex financial institutions will be required to submit their pay policies to a regulatory review – whether or not they have received bail-out money from taxpayers.

Meanwhile, the Treasury's special master for compensation, Kenneth Feinberg, confirmed that struggling firms still dependent on the public pocket will have to limit salaries to a maximum of $500,000 (£300,000) and that average total pay packages among top employees will drop by 50%.

...The measures fall short of a "cap" on bonuses demanded by certain European governments, including the French president Nicolas Sarkozy, at a G20 summit in Pittsburgh last month. But they are likely to please Democrats clamouring for action on Capitol Hill. LinkHere