The Obama administration's pay czar Kenneth Feinberg today said that he may not be able to resolve the "incredible gap" between Wall Street's and Main Street's views on appropriate executive compensation.
"I've learned about the incredible gap, the chasm between Wall Street perceptions and Main Street perceptions. It is a formidable chasm that I'm not sure can be bridged, although the law requires me to attempt to bridge that gap," Feinberg said in remarks at a Washington, D.C., conference held by the National Association of Corporate Directors.
"When I issue these packages I suspect I'll move to Pluto, which will be too close to Earth," he joked.
On or before October 30, Feinberg will issue his rulings on compensation packages for the top 25 executives at seven companies receiving what the administration has deemed "exceptional assistance" from taxpayers: AIG, Bank of America, Citigroup, General Motors, Chrysler, GMAC, and Chrysler Financial.
"We have been working daily to come up with actual dollars that can be endorsed by these seven TARP recipients," he noted. "And I will be very disappointed if these seven companies don't basically say that we have tried and basically succeeded in coming up with these compensation packages."
Feinberg, known as the "Special Master" for compensation, outlined three options at his disposal in dealing with contracts that existed prior to February 2009.
"One, I can find that those contracts under the law can be invalid. I am extremely reluctant to do that," he said.
"If the contract is valid under the law pre-Special Master, I may seek to renegotiate those contracts," he said of his second option. "I've had some real success in doing that."
"I have a third option," he continued, "which is to take those contractual amounts into consideration going forward in establishing 2009 and 2010 compensation."
Asked about his work with Citigroup that led the bank to sell its Phibro division, run by Andrew Hall who is set to receive a $100 million bonus, Feinberg replied, "Go talk to Citigroup."
"Citigroup made a determination in its wisdom," he said. "All I can say is the result speaks for itself."
Another recent case involved outgoing Bank of America CEO Ken Lewis, who after conversations with Feinberg agreed to receive no salary or other pay for 2009.
"I would have been surprised if it had led to anything else in light of the unique -- or not so unique -- facts of that individual case," Feinberg said.