Banks are getting squeezed by the government over pay, but maybe Wall Street is better off without employees who are unwilling to accept being compensated in ways other than the immediate gratification of cash.
NEW YORK ( TheStreet) -- The pay overhaul and temporary bonus cuts that are now sweeping the financial industry may prove which employees are devoted to their companies, and which are devoted to their lifestyle. Throughout the financial crisis that struck in late-2007, millions of Americans have lost their homes or jobs, and faced furloughs, pay cuts or waning perks until business conditions improved. Meanwhile, the financial sector was no stranger to layoffs initially, but its turnaround in hiring and compensation was remarkably quick. Some of the highest-paid employees at the banks and financial institutions that played the biggest role in the crisis haven't suffered much at all. In fact, before banks were shamed into revising pay plans, bonuses were poised for an all-time high at certain firms. As it stands, pay czar Kenneth Feinberg is ordering sizable cuts in compensation for the highest-paid employees at a handful of companies. His decision applies just for 2009 pay at just five companies that received "exceptional" taxpayer support: American International Group ( AIG), Citigroup ( C), General Motors, GMAC, Chrysler and Chrysler Financial. Bank of America ( BAC), once included in Feinberg's review, has managed to wiggle out of pay restrictions by repaying TARP funds in the nick of time -- except for CEO Ken Lewis, who will depart the firm at year-end with no 2009 compensation. He will, however, retain a retirement package estimated at over $70 million. AIG CEO Bob Benmosche managed to get Feinberg to weaken his more severe pay rulings for the highest-paid employees by threatening to quit. Several other top-level executives have threatened to do the same, and general counsel Anastasia Kelly is reportedly planning to quit.