The U.S. pay czar mandated restrictions on compensation at four firms receiving large sums of government aid, a move designed to more closely tie employee pay to company performance.
Kenneth Feinberg's determinations, which affect roughly 300 highly compensated employees at four firms receiving Troubled Asset Relief Program funds, don't dictate exactly how much each employee can earn but instead set guidelines governing the mix of cash and stock and incentive compensation.
The new rules apply to the 26 to 100 most highly compensated employees at American International Group Inc., Citigroup Inc., General Motors Co. and GMAC. While the policy only affects 2009 compensation that hasn't already been paid, the guidelines are expected to form the basis of similar restrictions for 2010.
Mr. Feinberg also required that the firms limit the total amount of money available for bonuses. The companies will be required to establish a "pool" based on a percentage of certain earnings or "other metrics" that have yet to be determined, the Treasury Department said.
Mr. Feinberg said the guidelines are "designed to send a message not only to these companies, but, we hope, to the greater corporate community."