Banks Paid Lavish Bonuses While Taking Bailout Funds: Pay Czar

It was already suspected, but now it has been confirmed. The Treasury Department's pay czar, Kenneth Feinberg, said on Friday that 17 banks gave their top executives $1.6 billion in bonuses at the same time the institutions were taking billions of taxpayer dollars in the form of bailouts.

However, Feinberg added that he does not have the authority to ask the firms to repay the bonus money that was handed out during the financial crisis. Instead, he said that new rules regarding executive compensation needed to be enabled, writing the following in a fact sheet:

"If the company's board of directors has identified that the firm is in a crisis situation, the compensation committee would have the authority to restructure, reduce or cancel pending payments to executives."

The report follows Feinberg's review of 419 companies that took bailout money prior to the pay curbs that were enacted by Congress in February of 2009. The bailouts began as the financial markets teetered in 2008, beginning in October 2008 with the Bush Administration.

Friday's reports comes shortly after U.S. President Barack Obama signed into law a financial reform package. One provision of the new allows shareholders a chance to vote on proposed pay for executives of public companies. Unfortunately, the shareholder votes won't be binding.

Many have said the financial package was watered-down, as was necessary to reach the 60-vote supermajority required to pass a GOP filibuster. Still others have added that nothing has really changed, as institutions are still allowed to trade in derivatives, which many point to as the cause of the financial meltdown.

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