US “pay czar” Feinberg expecting heat for rulings
By Karen Pierog and Steve Eder
CHICAGO/NEW YORK, Sept 30 (Reuters) – The Obama administration’s pay czar joked Wednesday that he might have to move to Pluto to escape the fallout from his first batch of compensation decisions, which are expected in October.
Kenneth Feinberg, a Washington lawyer appointed by President Barack Obama in June to decide on pay for the highest-paid employees of companies that received extraordinary government assistance, told a Chicago Bar Association event that he does not expect his rulings to be universally applauded.
“I’m not sure there will be any type of result here that is going to be praised …,” said Feinberg, who appeared via teleconference. “Likely, I’ll be criticized from both ends.”
He said he is meeting nonstop with Citigroup Inc, Bank of America Corp and American International Group Inc as he finalizes his first wave of compensation rulings. He has said he plans to report on his rulings in mid-October.
Feinberg said the discussions continue to be amicable, and he hopes he won’t have to impose pay curbs over the objections of the companies involved.
He met earlier Wednesday in Washington with White House and U.S. Treasury officials, including Treasury Secretary Timothy Geithner. He did not elaborate on the substance of the meeting, which caused him to miss appearing at the Chicago Bar Association event in person.
Last week, Feinberg spoke at a conference in New York and said he would rely on formulas rather than caps in setting compensation. He said he hoped his rulings would be set a precedent for forthcoming pay rules from the U.S. Federal Reserve that will impact pay at all Fed-regulated banks.
Feinberg has a great deal of latitude in making his determinations and can even claw back pay that employees have received if he finds that it was paid out unfairly.
After he makes his initial determination about whether to approve or disapprove pay contracts, the companies have 30 days to ask him to reconsider, after which Feinberg has 30 days to make a final determination.
The final determinations are binding, the Treasury has said.
After Feinberg finishes his review of pay packages for the companies’ top 25 employees, he will have to approve broader compensation structures for the 75 next-highest-paid employees.
(Reporting by Karen Pierog in Chicago and Steve Eder in New York; editing by John Wallace)