If AIG wants to learn what constitutes acceptable compensation in this market, they should look to one of Ken Feinberg's success stories so far, Lehman. While the cost of paying people to handle a firm with less than optimal growth prospects came in at a little over $400 million last year, the czar found less than an average GS bonus's worth of egregious behavior among the 23 law firms, financial advisers, investment banks and consulting firms involved in the clean up.
So far, Mr. Feinberg's committee has found relatively few problems with the fees charged in Lehman's bankruptcy. According to a report it filed with the court, the committee found just $223,262 in "inappropriate fees" through January 2009. It also recommended guidelines for future billing: no car service before 8 p.m., working meals limited to $20 per person and explanations for billing more than 18 hours in a day
So the message is clear. If you want to find institutions that pay appropriately in the current economic environment, don't look to the bailed out ones, look to the bankrupt ones.