WASHINGTON (Reuters) - The Treasury Department has selected Patricia Geoghegan to replace Kenneth Feinberg as the “pay czar” overseeing compensation at companies bailed out by the government.
The pay czar office was established during the financial crisis to ensure that bailed-out companies were not using taxpayer money to pay out excessive bonuses.
Feinberg, an arbitration lawyer known for his handling of the September 11th Victim Compensation Fund, became pay czar in June 2009.
Geoghegan, who has been working with the pay czar office for about a year, will oversee the pay practices at American International Group Inc, General Motors Co, Chrysler Group LLC and Ally Financial, according to the Treasury Department.
Originally the office oversaw seven companies but institutions such as Bank of America and Citigroup were released from its jurisdiction after repaying taxpayer money.
Feinberg was tapped earlier this summer by the Obama administration to administer BP Plc’s $20 billion oil spill fund.
Prior to joining Treasury, Geoghegan, 63, spent most of her career in private practice. She worked for the law firm of Cravath, Swaine and Moore LLP in New York for 33 years.
The pay czar’s office has taken fire from both sides as some critics charged it didn’t do enough to curb pay while the companies under its control chafed at times under the scrutiny, arguing it hobbled them against private sector competitors not subject to similar restraints.
On Friday, Feinberg issued a final report and acknowledged this tension while calling the effort a success.
“It is my personal belief that this Office made an important contribution to the highly-charged subject of executive compensation,” he wrote. “It remains to be seen whether our work will have a lasting impact. Only time will tell.”
The responsibilities of the office, whose official title is Office of the Special Master for TARP Executive Compensation, will continue until the remaining companies have repaid taxpayer money.
Reporting by Dave Clarke; Editing by Gary Hill and Carol Bishopric