US banks 'have made progress on pay structure'

Kenneth Feinberg believes American banks have improved the structure of their compensation packages, but must now focus on curbing excessive payouts.

The former 'pay tsar' of the Obama administration indicated that large bonus deals in the financial sector could still cause controversy, despite the progress made in other areas of remuneration policy.

"Now the question is 'how much are you paying people'?" he told the Financial Times.

"If you say 'look ... we're going to pay only ten per cent in cash' ... but if that cash is $5 million [£3.2 million], that's too much."

Mr Feinberg, who left his pay tsar role to oversee the BP oil spill compensation fund earlier this year, suggested that the creation of "a more realistic performance-based reasonable pay structure" on Wall Street should remain the primary goal for executives and regulators.

According to a report from the New York Times, several US banks are considering whether to bring their bonus payments forward to avoid higher tax rates that could take effect in 2011.