'Pay czar' for top US banking executives

KENNETH R Feinberg, who mediated disputes over compensation for damages from the September 11th attacks and Agent Orange, must now separate bankers from their paychecks.

Mr Feinberg, named yesterday as the Obama administration’s “special master” on executive pay, will have authority to regulate compensation for 175 executives at seven companies that received “exceptional” government help. He steps into the political maelstrom that erupted after disclosures that firms such as Merrill Lynch, blamed for fuelling the financial crisis, still paid workers multimillion dollar bonuses.

The 63-year-old Washington lawyer won praise for his work with 9/11 victims and assignments that included determining how much the government should pay heirs of Abraham Zapruder for his film of the assassination of John F Kennedy.

Mr Feinberg said in a phone interview yesterday he plans to make up for a lack of experience in executive pay by consulting experts.

“I’m not a czar who is going to impose my will,” Mr Feinberg said. “My mandate is to help determine compensation levels for the 175 people. I will consult with them and work with them.”

Wall Street pay has been under scrutiny since October, when reports that banks planned to keep paying bonuses amid the financial collapse prompted probes by New York attorney general Andrew Cuomo and Representative Henry Waxman, a California Democrat.

While top executives at many banks decided to forgo their bonuses for 2008 and overall compensation levels were reduced, the companies still made year-end payments to staff. Bonus payments have traditionally made up the majority of senior employees’ pay on Wall Street, which capped salaries in an effort to tie compensation with revenue.

In his new, unpaid job, Mr Feinberg will decide whether pay at the seven companies is “sound and appropriate, rather than excessive”, said White House press secretary Robert Gibbs.

His mandate gives him a say over pay for Kenneth Lewis (62), chief executive of Bank of America, as well as executives at AIG, Chrysler, Chrysler Financial, Citigroup, General Motors and GMAC. – (Bloomberg)