Failing Grades For The Pay Czar: “F’d” For Sure:

In our last issue we opined that a Pay-Czar was “probably NOT a good thing”…and his recent actions have proven us right

For starters, he’s diddled and daddled – dangerously – in terms of disbursing the “retention bonuses” that were awarded, pre-TARP, to key AIG employees. OK, we’d have to say; maybe $7000 for a “kitchen attendant” is way too much. (And probably, the kitchen should not have been “retained” anyway: Most folks we know at AIG are working 14 hour days, with no time – or appetite - to go to the dining room). But we know for a fact that loyal AIG-ers are struggling desperately to hang on to high-value clients – at a time when potential poachers are everywhere, and where the poaching, let’s face it, is sort of easy – even while THEY are getting offers to move elsewhere and to bring their clients with them. This, of course, would soon bring down the entire edifice. AIG investors – even those of us who think it’s mostly a write-off these days – ought to be mad as hell at Feinberg’s fiddling and faddling and diddling and daddling here, while the franchise itself is so seriously at risk: A big fat F…for you, Tsar Feinberg.

Worse yet, we say, is the total giveaway of Citigroup’s enormously profitable Phibro energy-trading business that Tsar Fienberg forced on Citi and its hapless shareholders: Here’s a business that had revenue of $667 million last year – and $1.86 billion in earnings over the last five years – that went to Occidental Petroleum for a paltry $250 million. This, as the WSJ pointed out, was merely “the net value of the unit’s assets, essentially its trading positions.” Oxy officers laughed out loud in the WSJ at the huge, premium- free coup they scored - while shareholders cried - with nary a penny to take to the bank - thanks to Tsar-F: “If you’ve got to sell, why should I pay a premium? What leverage does the seller have?” Oxy’s president and CFO crowed. “They would never sell this if it wasn’t for the pressure of the government in my opinion” he added, which, clearly was right on-the-money. All of this so the evil Andrew Hall, who was the brains and the brawn behind all the money Phibro made, would not get his anticipated bonus of approximately $100 million for 2009…from Citigroup, that is. You can bet he’ll get every penny – plus maybe a “signing bonus” on top from Oxy. And, as the Oxy CEO also noted about the Hall bonus in a neighboring article, “This would withstand any rational scrutiny that anyone would put on it. I hope they make a lot of money, because we’ll make even more.” As Citi shareholders ourselves, we have to say… “Thanks for giving away one of Citi’s best assets for a big fat NOTHING, Tsar F”.

And just as we were about to go to press, comes news that General Motors can’t find a qualified CFO for the $1 million cap on cash pay that the Pay-Tsar, in his godlike wisdom, think should be the max: Most other companies under Tsar-F’s thumb can offer up-front grants of stock to attract new talent and stock awards to flesh-out the pay package. But the literally poor GM, please note, has no stock that’s publicly traded yet, with no firm date for an IPO. Meanwhile, the current CFO is trying to keep his head up after a leak that Obama’s “car committee” questioned his abilities. The good news for GM is that it’s cost the poor incumbent two jobs so far, so at least they HAVE a CFO… for now. “So who needs a good CFO anyway?” as Tsar-F seems to be asking himself. Ouch! “F’ed” again!