House Financial Services Committee Chairman Barney Frank with House Speaker Nancy Pelosi. (Photo: Reuters)
House Democrats are urging the Obama administration to clamp down on corporate pay at seven large companies that rely on billions of dollars in federal bailout money.
Speaker Nancy Pelosi (D-Calif.) and Financial Services Committee Chairman Barney Frank (D-Mass.) said Wednesday they are concerned about reports that the firms continue to pay lavish bonuses.
In a letter to the administration, Pelosi and Frank said that the government "should make absolutely certain that financial institutions will never again play Russian roulette with the American taxpayers."
The seven companies are due to report on Thursday to the administration on how they will pay their top 25 executives. Kenneth Feinberg, the administration's compensation czar, will then rule on the pay plans within 60 days.
Feinberg's role was established after AIG's plans to pay $165 million in bonuses touched off more than a week of national debate and outcry over corporate pay. AIG has received roughly $180 billion in bailout aid.
"This dangerous imbalance between rewarding risk and forgiving mistakes is what Congress and the American people are determined to bring to an end," Pelosi and Frank wrote in the letter.
The seven companies are: Citigroup, Bank of America, General Motors, Chrysler, GMAC, Chrysler Financial and AIG. The firms have received hundreds of billions of dollars in combined taxpayer aid.
Pelosi and Frank also suggest that the compensation plans could "set standards for compensation planning that establish industry norms."