Pay czar says jury still out on reforms

NEW YORK (Reuters) - The U.S. official who slashed pay for 25 top financial executives on Thursday said regulatory proposals to rein in excessive compensation are like plain "vanilla prescriptions" that might work or might not.

U.S. pay czar Kenneth Feinberg told a panel at New York University law school that his rulings drew so much public interest because they concerned pay for specific individuals, while other regulators have offered only general proposals. He said those proposals sound good, but have not been tested.

"As far as I know, we are the only one who have actually calculated pay," Feinberg, the Obama administration's point man on pay, said during the panel discussion about the future of regulation and the capital markets.

Last month, Feinberg slashed compensation for the top 25 earners at the seven companies for the final two months of the year -- when bonuses are typically paid.

The seven companies are American International Group Inc (AIG.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N), General Motors Co GM.UL, Chrysler, GMAC and Chrysler Financial.

Feinberg has said financial firms should be prepared to face tough scrutiny from regulators on pay plans.

The Federal Reserve last month issued bank pay guidelines aimed at curbing the type of reckless risk-taking officials say contributed to the crisis that nearly brought down the financial system last year.

Top bank executives met with Fed officials on Monday to discuss the process for the incentive compensation arrangement reviews that are part of the new guidelines.

Feinberg said his office has met regularly with Fed officials and has also met with officials from the Securities and Exchange Commission and with Sheila Bair, chairman of the Federal Deposit Insurance Corp.

Feinberg was appointed as the pay czar in June amid public outrage that companies bailed out by the government were still paying huge bonuses.

Before his first wave of rulings, Feinberg joked he might need to move to Pluto because of the reaction he expected. But on Thursday he said he felt the reaction was "satisfactory."

The panel also included Neil Barofsky, the special inspector general for the U.S. Treasury's Troubled Asset Relief Program, which was used to bailout banks amid the financial crisis.

Feinberg is now in the process of ruling on the compensation structures that will apply to the 26th to 100th highest-paid workers at the seven firms. (Reporting by Steve Eder; Editing by David Gregorio)