THE Obama administration’s pay tsar says he doesn’t want his authority to set pay standards, which currently covers seven US firms, to expand to a broader range of companies that have received government aid.
Kenneth Feinberg, who last week slashed the average compensation for 25 employees at the seven firms by about 50 per cent, told a House committee that additional oversight of pay practices at the hundreds of other firms that have received government aid isn’t warranted.
"I believe the final compensation determinations I make and discuss in my report are a useful model to guide others in the private marketplace. But that is where my authority should end," Mr Feinberg said in testimony before the House Committee on Oversight and Government Reform.
Darrell Issa of California, the committee’s ranking Republican, assailed "corporate greed and corruption" but said he was wary of Mr Feinberg’s role of having say over any corporation’s pay.
"Just as government bailouts of failed firms are misguided, so too are efforts to place a cap on the rewards of true innovation and success," Mr Issa said.
Mr Feinberg said he too was wary of acting outside his mandate from Congress, but said the seven firms are exceptions to the government’s broader reluctance to get involved in compensation issues and were covered by legislation passed earlier this year. In this case, the government is acting as a major shareholder in a firm it owns a significant stake in.
"These seven companies are owned by the taxpayer and the taxpayers are acting as creditors," Mr Feinberg said.
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