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US may push bailed-out firms to rework pay

A US Treasury official overseeing compensation at firms that got big federal bailouts may renegotiate pay packages that he thinks are too generous, the Wall Street Journal reported on its website.

The official, Kenneth Feinberg, is expected to press firms and employees to rework contracts that are too high, the paper said. If that does not happen, he may reduce compensation in other ways, including future pay, the paper said.

The paper said seven firms have to submit proposals for their compensation packages by August 13. These are Citigroup Inc, Bank of America Corp, American International Group Inc, General Motors Co, Chrysler Corp, Chrysler Financial and GMAC Financial Services Inc.

GMAC has proposed that it pay its top employees a mix of 20% cash and 80% stock, the paper said.

“Companies will need to convince Mr. Feinberg that they have struck the right balance to discourage excessive risk-taking and reward performance for their top executives,” the paper cited Treasury spokesman Andrew Williams as saying. (Reuters)