White House appoints Kenneth Feinberg '70 as compensation czar to oversee executive pay
In response to widespread public outrage over high pay at companies receiving taxpayer assistance, on June 10 the Obama administration appointed Kenneth Feinberg '70 to be a compensation czar who will have broad discretion to set the pay for 175 top executives at seven of the nation’s largest companies which received hundreds of billions of dollars in federal funds.
Feinberg, founder and managing partner of Feinberg Rozen, was the special master of the September 11th Victim Compensation Fund of 2001, which was established by Congress 10 days after the attacks as an administrative alternative to litigation for the immediate victims. Participation in the fund included approximately 97 percent of the claims by families of the victims and those who were injured. The fund paid out more than $7 billion to 5,560 claimants through June 2004.
According to the New York Times, in his new role, Feinberg, who will not receive any government compensation, will set the salaries and bonuses of the top 25 executives at the American International Group, Citibank, Chrysler, Chrysler Credit, General Motors, GMAC, and Bank of America.
For 80 other financial institutions that received federal assistance, Feinberg will develop the overall compensation structure but without setting the exact level of pay. The goal is to reduce excessive risk-taking by executives whose compensation is tied to executive performance. Feinberg also will determine if it is in the public interest to force any executives at companies receiving assistance who might have been overpaid to return some of that compensation.
Before becoming special master of the September 11th Victim Compensation Fund, Feinberg had been appointed by federal district judges to resolve some of the most difficult product liability lawsuits involving victims of asbestos, Agent Orange, and the Dalkon Shield, a birth control device that injured more than 200,000 women. He also was one of three arbitrators who determined the fair market value of the Zapruder film that captured the assassination of President John F. Kennedy.
Posted on June 10, 2009