The Obama administration's pay czar said Wednesday his negotiations over executive compensation with the seven companies that received the biggest helpings from the federal bailout pot have been "a consensual process" and not a matter of forcing decisions on them.
The Obama administration’s pay czar said Wednesday his negotiations over executive compensation with the seven companies that received the biggest helpings from the federal bailout pot have been “a consensual process” and not a matter of forcing decisions on them.
“I’m hoping I won’t be required to simply make a determination over company objections,” veteran Washington attorney Kenneth Feinberg told the Chicago Bar Association in a speech delivered over a television link.
Feinberg said he hopes when he announces pay levels for 175 top executives by Oct. 30 the seven companies will consider them fair and based on principle.
“It’s been a very consensual process and I hope it will continue to be consensual,” Feinberg told the attorneys.
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Feinberg, who is technically a special master at the Treasury Department, said he doesn’t even agree with the informal title of pay czar, emphasizing that he is working with the companies and not dictating to them.
He said the pay levels need to allow the companies to be competitive, be performance based and keep executives in their jobs for the long haul.
He said it will be a bad thing if after he announces his decisions the companies say, “that’s great, we’re going to lose all our people and we’re not going to be competitive.”
“I haven’t done my job then,” he said.
Feinberg was named to his Treasury Department post by the administration in hopes of making sure top executives of the seven companies that got the largest amount of bailout money don’t walk off with runaway salaries.
The companies are American International Group Inc., Bank of America Corp., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
Feinberg had planned to address the bar association at a Chicago luncheon. But he was called to a meeting at the White House on Wednesday morning and was unable to come to Chicago. Instead, he spoke via a television hookup.
He is required by law to set pay levels for the top 25 executives at each of the companies. He also must set up the pay structure although not individual amounts of pay for the other executives in the top 100 at the seven companies.
Feinberg expressed uncertainty about one power that he has – to call for so-called clawbacks in which the government would try retroactively to recover excessive pay that executives may have already received.
“I’m not sure it’s a good idea if the Department of the Treasury is seeking to recover through cajoling or litigation moneys that may already have been spent,” he said. He said there might be rare cases when it would be necessary.