In a new report issued by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Treasury's Office of the Special Master for TARP Executive Compensation (OSM) is faulted for its excessively generous compensation at seven companies receiving bailout funds, including American International Group (AIG), General Motors (GM) and Ally Financial.
‘OSM awarded $6.2 million in pay raises to 18 of the 18 employees for whom the companies proposed raises,’ the report says. ‘Treasury approved a $1 million pay raise for AIG's CEO of its subsidiary, Chartis, a $200,000 pay raise for an employee of its subsidiary, Residential Capital LLC (ResCap) – weeks before ResCap filed for bankruptcy – and a $100,000 pay raise for an executive at GM's European unit, despite that unit experiencing significant losses. OSM's written explanations for the pay raises lacked substance, largely parroting what each company asserted to OSM without any independent analysis by OSM.’
The report specifically questioned the leadership of Kenneth Feinberg, the former Special Master for TARP Executive Compensation, and his successor Patricia Geoghegan, the Acting Special Master, in regard to the OSM's display of surplus benevolence.
‘Feinberg previously told SIGTARP that he limited cash salaries to $500,000 and shifted compensation more toward stock to reduce excessive risk and keep employees' 'skin in the game,'’ the report continues. ‘Feinberg testified before Congress that 'base cash salaries should rarely exceed $500,000, and only then for good cause shown, and should be, in many cases, well under $500,000.' Never have there been so many exceptions to the $500,000 cash salary guideline for the number of people under the Acting Special Master's jurisdiction as there was in 2012.’
The full report is now available online.