President Obama's pay czar said he tried to balance competing arguments before moving to cut salaries of 25 executives at seven firms that have received federal bailout money.
"I've tried to balance both sides, listening carefully to what is said in the way of citizen anger and also the statute, which requires that these companies stay in business and thrive so we get repayment," the pay czar, Kenneth Feinberg, said in an interview with ABC News.
Seven companies receiving "exceptional" amounts of taxpayer aid will slash the annual salaries of their 25 top executives by an average of 90 percent from 2008 levels.
Feinberg, who was appointed at the Department of the Treasury to manage compensation issues for companies receiving federal bailout money, said he hoped other companies will follow in the same footsteps but that it's not the government's place to impose any laws on executive compensation.
"I'm hoping that, using these seven companies as a template or as a model, that other companies will voluntarily see the wisdom of the way we've structured compensation -- less cash, more long-term stock tied to the financial future of these seven companies. Hopefully others will see the wisdom of this and follow suit voluntarily," Feinberg said.
But he added, "This is a unique situation involving these seven companies who are, in effect, owned by the taxpayer. I do not think it wise nor prudent to expand the jurisdiction of what I'm doing now."
Obama today praised the move to cut executive pay by his pay czar.
"This is America," Obama said. "We don't disparage wealth. We don't begrudge anybody for doing well. We believe in success. But it does offend our values when executives of big financial firms that are struggling pay themselves huge bonuses even as they rely on extraordinary assistance to stay afloat."
Saying that Feinberg has taken "an important step forward today," the president said that more work needs to be done, and called on Congress to pass legislation giving shareholders a voice in executive pay packages.
The seven companies receiving "exceptional" amounts of taxpayer aid will slash the annual salaries of their 25 top executives by an average of 90 percent from 2008 levels.
Overall, the total compensation for the 25 executives, including yearly bonuses and retirement pay, will be cut by an average of around 50 percent. Additionally, any of the 175 executives who want more than $25,000 in special perks -- such as private planes, limos, company cars or country club memberships -- will have to receive government permission first.
Combined, the executives have received almost $300 billion in taxpayer dollars, more than the gross domestic product of South Africa or Portugal.
Responding to criticism that curbing pays might cause an exodus of top talent and in fact hurt the companies and American taxpayers, Feinberg said "it's a big concern" but that his "primary obligation here is to make sure under the law that the taxpayers get their money back that was lent to these companies."