i would love -- if ken feinberg can regulate the entire securities industry, maybe we can do away with guaranteed compensation, but he only regulates seven companies and if you handicap them, they're at a competitive disadvantage. >> i didn't mean to interrupt. but andrew, i think guaranteed bonus is an oxymoron. the essence of a bonus is performance. it's incentive. >> but that's not what keeps people moving. the number is a guaranteed percentage. 10% of what you make. they're not saying you get $300 million, 10% of what you make. >> bonus is an oxymoron itself. it's a misnomer, it arose out of wall street when it used to be a partnership. it's no longer a partnership, they should call it what it is, deferred wages. these guys make a lot of money. >> cap compensation. >> it is -- >> here's my question. if you don't deliver, andrew, if you don't make your percentage -- i don't know what the percentages are, but i worked on wall street years ago at bear stearns. if you don't make it, you don't get it. to me a guaranteed performance bonus is an oxymoron, is it not? i come back to that. >

now pay czar ken feinberg must balance what's fair to firms and to shareholders. we talk with an executive pay expert about what's at stake. >> suzanne: with earnings season winding down, we look at a growing divide in corporate results, earnings spurred by growth, and those from cost cuts. >> paul: ford motor's boosting production as cash for clunkers clears showrooms of new cars and trucks. now the administration says clunker vouchers will be good for future purchases. >> you have to be really smart about how you use your money nowadays, so coming here, it's a better way to save money. >> suzanne: that's jennifer, and value is why she and millions of other freshman are staying close to home for college this fall. >> paul: i'm paul kangas. >> suzanne: and i'm suzanne pratt. susie gharib is off tonight. this is "nightly business report" for thursday, august 13. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. thank you. >> suzanne: good evening, everyone. today is the deadline

now it appears ken feinberg may be changing rules mid game.hael says this is proof everybody is a target. mike? >> david, as the obama administration has forced more and more people and companies onto its plantation, it's exerted greater and greater influence in terms of how much money people and how much money companies can earn and how they can spend that money. we have already seen this in the past where it was prohibiting companies, for instance, that received some tarp money from spending money on sporting events. you're also effecting those sporting events, whether it be golf, baseball, whatever. that has a big effect on even companies and businesses who have not received bailout money. this is a huge, huge problem. david: quentin, should everybody be afraid? >> well, people got pushed onto the government's plantation, particularly wall street where we're talking about these big pay packages, during the bush administration. and you know something? it was probably a good thing because they had destroyed the world economy with their shenan

and ken feinberg, the powerful lawyer who is reigning in t companies who got government bailouts. with the three of them for an insider's view of the senator's life. you three had such unique access to him, in such a personal way. what are the memories that give you comfort? >> the number one rule i learned from senator kennedy, that came from legislation when i was there. the perfect is the enemy of the good. and he would be a vigorous defender of his position, up to a point. then, he would be able to maneuver some sort of compromise that would make nobody thrilled or happy. but would be sufficient, better than the alternative of doing nothing. >> was he tough? >> oh. >> was he tough? >> i'll tell you a story about his toughness. he didn't stay mad if he got mad. during the '80 campaign, kerry parker and i gave him a memo. he said, you guys are in real trouble. i said, why? he said, you gave him a wrong fact. he comes out. and he does not look happy. and he looks at kerry and me. and he says, get in the limo with me. we sit down. he looks at us. he says, i will thank you to let m

i guess that's ken feinberg technically. the guy voting that stake. >> tough questions. you don't get quality people unless you pay them. >> that's very true. >> that simple. >> all right. >> revenge on yourself. coming up, stocks on the move. temple, inland mp. global. biggest decliner for the nasdaq today. and has this derailed the health care debate? >> what was supposed to be health care town halls have become forums for airing of every government grievance of taxes to alleged monitoring of e-mails. what the administration has to do to get the base back on track. that's in today's harwood file. s call or click today. >>> in the head lines this hour, markets decline. accelerated for a while. stabilized now. we are down triple digits. boeing, boy, oh, boy. lower on the story you probably saw. another delay in dream liners. joy global heaviest on the nasdaq. crude oil, crude oil, is down more than a buck. back below 69. earlier 69.35 now. >> we want to bring your attention to some stocks on move. matt nesto back with the real-time flash. matt? >> all kinds of things mov

and now andy hall is offering concessions just to avoid combat with ken feinberg. joining me is julia ruzinski, joe cat wince, republican strategist and erone brook. where to start. conservative or liberal. let me just go with liberal. julie, don't you think really that wall street is much better at figuring out the right pay practices than some lawyer who has no experience on wall street? >> actually, i think wall street is absolutely horrific in figuring out pay practices. especially when they're taking taxpayer dollars to fund their own pay. the situation with andrew hall is complicated. he set up a contract and it sounds to me he's entitled to what the contract stipulates. but sorry, they failed in the past. i don't want to be spending my money on them anymore. >> joe? >> julie, if you want your taxpayer dollars to be well spent, make sure the company succee succeeds. and the best way for citigroup to succeed is for andrew hall to be paid and given an incentive to continue to succeed. these are the people that are going to bring the company back. the government

it won't end until ken feinberg, who is one of the two or three dozen czars that obama has, the compensation czar, basically rules on the compensation of citigroup, which sources tell cnbc he is looking at their compensation right now. he's going to come to some determination on the compensation of the top 40 people at citi, including hall. at that point, they'll announce what they'll do. this is going to happen over the next couple of weeks. what i hear from inside citigroup is that they are -- and they're terming it a restructuring. what that means, i don't know. >> take a guess. take a guess. >> the relationship will be restructured. what i gather is that there's a very good likelihood that this thing is going to be spun off. so, you know, they don't have to deal with this anymore. here's the fascinating thing about this whole thing. fibro was a long-time energy training company. it's how the old solomon brothers became public by buying fibro. mark rich worked at fibro. >> i remember. i'm not kidding. >> here's a semiautonomous sort of -- >> when gold was at the all-time high, they overpa

>> i believe we will be going through the process with ken feinberg to make sure it is consistent with find a ceo that is knowledgeable about insurance companies, running an insurance company, and hopefully getting an ailing company back to health again. >> the company is about 80% owned by taxpayers, taxpayers that make $40,000 a year. why should they not feel like suckers if they see the ceo of a government-owned company getting $7 million a year? >> the board is going to make a decision. we have talked about the fact that we are not a migrant- managing these companies, the government is not making these decisions. the board wants an insurance company ceo that can take a company that was once successful but somebody had the bright idea to put a hedge fund on top of it, and now is a royal mess. the board wants to see some good, confident leadership that can mean the company back to profitability, and hopefully, in the recruitment -- recoupment to the taxpayer. >> does president obama ever speak with bill or hillary clinton about health care aspects? >> obviously, the secretary of stat

ken feinberg said he could call back executive compensation while finance min snerz europe say they are ready to crack down on excessive bonuses. tdd# i'm racing cross country in this small sidecar, but i've still got room for the internet. with my new netbook from at&t. with its built-in 3g network, it's fast and small, so it goes places other laptops can't. i'm bill kurtis, and wherever i go, i've got plenty of room for the internet. and the nation's fastest 3g network. gun it, mick. (announcer) sign up today and get a netbook for $199.99 after mail-in rebate. with built-in access to the nation's fastest 3g network. only from at&t. nefits of adding abilify. >>> welcome back to the show, "worldwide exchange." we'll look at the equities market around the world. we're joined by our reporters all over the place. karen joining us from zurich if my eyes don't deceive and silvia from frankfurt and stephane from france. alsosoin the u.k., the ftse 100 at this stage is lower by as low as 1%. let's take a quick check on what's going on the ftse 100 specifically. we are being led lower on that m

i think another reason why, you know, there hasn't been much action on this, ken feinberg is going aboutly. personally, i think this idea of clawing back and taking bonus money away from people as a corny as it might be these folks are earning a hundred million dollars in bonuses and men in bonuses that most of the nation wouldn't ever make in salaries in their lifetime, i think it sets a really awful precedent when you have the government -- >> hang on, hang on! >> contract is not -- that your contract shouldn't be honored. >> let's be clear then, jonathan. to follow that logic, you would say it's -- if i buy a house, i buy a$10 million house opinion i cannot make the payment. they foreclose the house on me. how is that different i sell aig and i sell insurance on all of the loans in america, i cannot pay for any of the defaults but i keep a few hundred million dollars or billion dollars in bonuses and then when the hurricane of credit defaults comes, i stick the losses with the government. to me, it's a direct parallel to a housing foreclosure and to say it's a bad precedent to take an

ken feinberg is now the paczar and the basis for this cla back, i'm not suggesting the government operateoside the law, the legal basisf the claw back is fraud. if if you are making representations to your board of directors, yourshareholders and claing that you're earning a certain amount of profit, but the reality is that profit is a phantom because at the same time you're taking so much risk that it is inevitable that that profit will go away, that is his basis and i think that is a valid approach. essentially the losses over the past two years have wiped out 10 years of profit. so go back over that past 10-year period and you're looking at any profits that were based, any bonuses, stoci options, etcetera based on the profits and that will be the basis of his proceeding. i assume he will threaten litigaon and then settle for $.50 on the dollar. if you are sam o'neal and have millions you may b kicking back millions. he was the c.e.o. of merrill and a few before him. the second question, refresh my recollecti collection, what was the second question beyond the pay? >> caller: actually i

>> this will go to the process of ken feinberg to ensure that is consistent with his principles and obviously board wants to find a ceo that is knowledgeable about insurance companies and running an insurance company and hopefully getting an ailing company that was once a successful insurance company the idea of putting -- the bright idea of putting a hedge fund on top. >> they owe taxpayers who make 34 the thought -- $30,000, $40,000, $50,000 per year. why should the ceo of this company gets $7 million per year? >> look, the board is going to make a decision. we have talked about and the president has talked about not micromanaging these companies, governments not making these decisions. the boardç wants an insurance company ceo that can help take a company that was once successful, as i said, somebody had the bright idea of putting a hedge fund and on top of it and now it is a royal mess. i think the board wants to see some good, confident leadership that can leave the company back toward profitability and hopefully recoup some of the investment the taxpayers put out in order to prevent ca

. >>> president obama's pay czar ken feinberg is expected to approve the pay package of ai gchl's ceo we're. he's expected to receive $10 million. even . >>> mer he was reached out to hank greenberg for advice. greenberg says he has the best chance to succeed in rebuilding aig. aig shares were up yesterday by 15%. >>> new fdic rules broadening the pool to make it easier, some say, for private equity firms to make deals. john kanas' private equity firm bought bank united, former ceo of norfolk. >> good to see you. >> some would say, it could be worse. you don't see it that way? >> it's good news for large strategic banks, obvious competitors in this business. it requires private equity to hold roughly double the amount of capital that their competitors will have to hold in the same situation. it singles them out as a category. and it's not going to make it any easier. it's certainly not going to access more capital from the sector for what we think is an ongoing problem and going to continue on. >> is it enough to sq uchl elch om deals? >> i don't think so. i think they'll continue to

loan toes submit executive pay xankz compensation plans to ken feinberg. trader andrew hall, his $100 million contract with citi has been in the headlines a lot lately. now hall's contract may not be subject to pay czar's oversight because it was signed before february 11th. but another source says feinberg still has plenty of flexibility, using his authority on a case-by-case basis. that's the big question, will he get his money? will that unit stick around at citigroup and -- >> or is he grandfathered in? >> but if he doesn't stick around at citigroup, it's a big question, too. this guy is a big rainmaker. >> did they call him? >> there was a report the other day that they had called him to see if he was interested, they called him and he made a bid and apparently they didn't go with it. >> fasb is reportedly holding a board meeting today to discuss a proposal that financial instruments be carried at fair value on balance sheets. no immediate action is expected on that proposal. if there's eventually a change in the mark-to-market rule, it could impact e

ken feinberg is now the pay-czar and the basis for this claw back, i'm not suggesting the governmentrate outside the law, the legal basis of the claw back is fraud. if if you are making representations to your board of directors, your shareholders and claiming that you're earning a certain amount of profit, but the reality is that profit is a phantom because at the same time you're taking so much risk that it is inevitable that that profit will go away, that is his basis and i think that is a valid approach. essentially the losses over the past two years have wiped out 10 years of profit. so go back over that past 10-year period and you're looking at any profits that were based, any bonuses, stock options, etcetera based on the profits and that will be the basis of his proceeding. i assume he will threaten litigation and then settle for $.50 on the dollar. if you are sam o'neal and have millions you may be kicking back millions. he was the c.e.o. of merrill and a few before him. the second question, refresh my recollecti recollection, what was the second question beyond the pay? >> c