Obama's pay tsar to unveil salary curbs

TOPBANKERS at London-based subsidiaries of US financial institutions are facing a reduction in their cash salaries as the Obama administration&rsquo;s pay tsar prepares to place restrictions on remuneration at bailed out lenders.<br /><br />Kenneth Feinberg, the US lawmaker tasked with looking into pay in the financial sector, is to unveil measures which would see a large proportion of salaries &ndash; understood to be around 50 per cent &ndash; paid in shares, vesting only after five years.<br /><br />Feinberg is expected to unveil proposals within weeks that would impact on seven firms deemed to be in receipt of exceptional state aid.<br /><br />The companies are Bank of America, Citigroup, American International Group (AIG), General Motors and GMAC Financial, Chrysler and Chrysler Financial.<br /><br />Obama&rsquo;s pay tsar was given a mandate to ensure that pay at the seven companies was more closely linked to long-term performance in future, in an effort to end the culture of short-term profit-taking which has been blamed for the financial crisis.<br /><br />Feinberg has said that he will use formulae and data analysis to determine appropriate levels of executive compensation, rather than relying on blanket pay caps.<br /><br />He has also ruled out publishing data on the identities and salaries of top earners at banks, saying &ldquo;we don&rsquo;t want specific names next to dollars&rdquo;.<br /><br />Earlier this year, the US government moved to restrict bonuses at bailed out firms They were banned from paying bonuses to top executives and staff and told to cap bonus pools at one-third of total pay.<br /><br />The Federal Reserve is due to issue new guidelines on remuneration for all financial institutions later this month, following on from the UK agreement which saw the five major banks agree to abide by the G20&rsquo;s guidelines on pay.