* Seven firms must submit pay plans to Treasury by Aug 13
* Pay packages cover top 100 employees per company
* White House: Trader's $100 mln pay seems "out of whack"
WASHINGTON, July 27 Seven financial and
automotive companies that have received "exceptional"
government aid face an Aug. 13 deadline to submit compensation
plans to the U.S. Treasury Department's executive pay czar,
people familiar with the process said on Monday.
Kenneth Feinberg, who has authority over the top 100
employees' pay, has been consulting with the seven companies,
which include Citigroup Inc (C.N), American International Group
Inc (AIG.N), Bank of America Corp (BAC.N), Chrysler Financial,
Chrysler LLC, General Motors Co [GM.UL] and GMAC Inc, a
Treasury spokesman said.
Feinberg, a lawyer, cannot force companies to break
contractual obligations not covered by the statute that governs
the pay restrictions, but has "broad authority" to ensure that
pay is appropriate, Treasury spokesman Andrew Williams said.
"Companies will need to convince Mr. Feinberg that they
have struck the right balance to discourage excessive risk
taking and reward performance," Williams said. "That process is
just beginning now."
He added that the process is designed to help companies
"strike the right balance around their need to retain talent,
reward performance and protect the taxpayers' investment."
Pay that may seem excessive drew the attention of the White
House after The Wall Street Journal on Saturday said Andrew
Hall, who heads Citigroup's energy trading unit Phibro LLC, is
pressing the bank to honor a contractual obligation to pay him
a potential $100 million in 2009.
Citigroup has taken $45 billion of federal bailout money
and is expected this week to give the government a 34 percent
equity stake. Keeping Phibro and its top performers, even at a
high price, could bolster Citigroup's finances, making it
perhaps easier for the bank to repay the government sooner.
Asked about Hall's possible pay package, White House
spokesman Robert Gibbs said "one could easily come to the
conclusion that that's probably a bit out of whack on any pay
A Citigroup spokeswoman, Danielle Romero-Apsilos, declined
to comment on Hall's compensation.
But she added: "Retaining and attracting the best talent is
very important to the success of Citi and all its stakeholders.
Citi continues to examine ways to ensure its employee
compensation practices are competitive in this very challenging
Some of Citi's chief competitors, such as Goldman Sachs
(GS.N), Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N)
will be able to offer higher bonuses to top executives because
they have repaid government capital and are free from pay
A GM representative said the automaker, which emerged from
bankruptcy protection earlier this month, would meet the Aug.
13 deadline to report its executive pay plan.
GMAC spokeswoman Gina Proia also said the finance company
was working with Treasury on compensation. "Attracting and
retaining key talent is critical toward continuing our efforts
to transform the company and restore profitability," she said.
Feinberg has already had some influence on executive pay.
AIG, the insurer reeling from public fury over its payment of
$165 million in bonuses to some executives in March, did not
make bonus payments of $2.4 million due on July 15, a senior
Treasury official said last week.
(Reporting by David Lawder in Washington, Jonathan Stempel in
New York; Soo-Young Kim in Detroit; editing by Leslie Gevirtz)