"That makes it sound like I'm going to issue some imperial decree on the subject of compensation. There's nothing further from the truth," Feinberg said Thursday, one day after his appointment. "My goal is to reach out to these seven companies and meet with them and work out an acceptable compensation program -- acceptable to the business community, acceptable to the administration, and hopefully acceptable to Congress and the public. It's a challenge, but I think it's do-able."
Feinberg's sensitivity about his title is understandable – he now finds himself in the delicate position of balancing the populist uproar about excessive pay with growing fears that the government has gotten too involved in the private sector.
"Historically the American people frown on the notion of government insinuating itself into the private marketplace," he said in an interview with ABC News. "My answer to those critics is I understand that concern, I share that concern, and the question is how do you strike a balance between that legitimate concern and the populist outrage at prior industry compensation practices?"
Feinberg's actual title is "special master," charged with supervising pay for the top 100 salaried executives at bailed-out companies receiving "exceptional assistance" from the government – AIG, Citigroup, Bank of America, General Motors, GMAC, Chrysler, and Chrysler Financial.
It was AIG, three months ago, that incited an uproar when the insurance giant, after receiving around $180 billion in taxpayer aid, paid out $165 million in corporate bonuses. Now these seven companies, each receiving tens of billions of dollars from the $700 billion Troubled Asset Relief Program, will have to submit their compensation plans to Feinberg for approval.
"We felt in the case of companies that receive such exceptional tax assistance, we had to have a stronger fiduciary duty," said Gene Sperling, a counselor to Treasury Secretary Tim Geithner, at a House Financial Services committee hearing Thursday. "We felt that if we could find somebody of the judgment and stature of Ken Feinberg who could look across the companies, looking at a set of principles on risk, on performance and also on what is likely to lead taxpayers to get return on their dollar -- that that extra level of protection for the taxpayer was necessary and important."
However, critics have seized on the new oversight, arguing that it is just the latest step for an administration that has become too involved in private companies.
"We need to get the government out of businesses," urged Rep. Spencer Bachus, the committee's ranking Republican, at Thursday's hearing.
Such vocal opposition is not lost on Feinberg.
"What's jumped out at me is this very real tension between the populist rage at these windfall bonuses versus the historical reluctance of the American people to permit the federal government to insinuate itself and micromanage these companies," said Feinberg. "And that tension is very apparent to me no matter which way I turn – you're facing criticism either from those who are appalled at what these companies did versus those who question the value of the government getting involved."