Pay 'Czar' Feinberg: I'm Not Eager To Use Imperial Edicts
The man known as President Obama's "czar" of CEO pay, Kenneth Feinberg, said on Thursday that he finds the title "unfortunate" and believes that the criticism he is getting from both sides of the compensation debate means he must be doing his job right.
Speaking at the Bloomberg Washington Summit, Feinberg beat back questions about the power he wields and role he's played in limiting CEO pay at seven institutions dependent on government bailout funds.
"I must say, this czar characterization is very unfortunate," he said at one point, when asked what he could do about corporate governance -- something not under his domain. "I really am not eager to use imperial edicts. I would rather cooperate with these companies. And they've been very cooperative."
His goal is to implement a policy authorized by Congress, based on respecting the need to keep these institutions "thriving" while simultaneously getting the taxpayers money back, he said. The fact that some people feel he's gone too far and others are hungry for more, he said, indicates that "maybe I've struck the right balance."
In late October, Feinberg ordered a 90 percent cut in average salaries for the top 25 executives at Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
"There was no vindictiveness in my decision," Feinberg explained. "There was no revenge. It was strictly: Here is the statue, here are the accompanying regulations, here is the Congress watching... and here is what I think, in my assessment, will keep these companies thriving."
Asked whether he thought his purview -- which consists only of those institutions still dependent on taxpayer funds -- is too limited, Feinberg replied:
"I have no jurisdiction over nor should I have over these other Wall Street firms. I hope that the recommendations that are made on compensation -- particularly the structure -- will be voluntarily adopted by Wall Street firms and other companies... But that's up to them."
The position of pay czar -- if you will -- was established earlier this year when Congress amended the language of the TARP legislation to ensure that a situation similar to AIG's issuance of exorbitant bonuses did not happen again. Feinberg, a protege of former U.S. Senator Ted Kennedy, took over the post as part of pro-bono work.
It is, in many ways, a no-win situation, with those angry at Wall Street's excesses demanding stiff punishments and devotees of the capitalist system decrying the heavy government hand.
"I must say," Feinberg acknowledged, "you cannot help but be sensitive to the political realities. What good is it to render decisions if they will be so vilified and criticized by Congress that the very companies that you want to thrive are placed in jeopardy?"
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First Posted: 11-12-09 10:10 AM | Updated: 11-12-09 10:27 AM