Critics see him as more sympathetic to other high-earners
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(WASHINGTON) The 'pay czar' tasked by the US government with ruling on the eye-popping compensation of some of Wall Street's top earners is far from a stranger to big pay cheques and the trappings of wealth.
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| Mr Feinberg: He made US$5.76 million last year as a partner in his Washington law firm |
Kenneth Feinberg made US$5.76 million last year as a partner in his Washington law firm, Feinberg Rozen LLP, according to a government ethics filing obtained by Reuters.
And his assets, which include a stake in his law firm, two homes and dozens of investments, are worth anywhere from US$11 million to US$37 million, according to the filing, which places assets in broad value categories.
His homes are a US$1.66 million house in Bethesda, Maryland, near Washington, and a US$1.96 million vacation home in West Tisbury, Massachusetts, on Martha's Vineyard.
And he has investments in a series of public companies, including eBay, Wal-Mart Stores Inc, Pepsico Inc, Bed Bath & Beyond Inc and Berkshire Hathaway Inc - though none in the banking and auto companies bailed out with government money, Mr Feinberg's ethics filing shows.
In addition to income from his law firm last year, Mr Feinberg also reported gains on his investments, including dividends, and US$53,624 received from eight law schools.
He also reported US$32,200 in income from his interest in Strategic Settlement Advisors, a Washington claims settlement company. And he sold his stake in a development on Jekyll Island in Georgia last year, making up to US$1 million on the sale.
Seven companies still locked in the US Treasury's Troubled Asset Relief Programme, including Citigroup, American International Group and Bank of America, have had to submit proposed compensation plans for their 25 highest-paid employees to Mr Feinberg. He also has oversight over compensation for the best paid at Chrysler Financial, Chrysler Group, General Motors and GMAC.
While Mr Feinberg, who was appointed in June, is working for free as the 'pay czar,' the fact that he is wealthy could bring some solace to critics on Wall Street who believe his lack of experience in the realm of executive compensation could colour his decisions on how the top executives are compensated.
'If he is successful and he is compensated as a successful person, it certainly gives him a different view on the evaluation of other successful people,' said Charles Elson, the director of the Weinberg Center for Corporate Governance at the University of Delaware. He said Mr Feinberg's salary would make him more sympathetic to other high- earners and more likely to enjoy a similar lifestyle.
After all, Mr Elson said, 'He's being paid like a Wall Street lawyer.' Still, Mr Feinberg's mission is not to judge the number of zeros.
'If you asked a citizen who earned considerably less than that to opine on whether payment was excessive or not, they might have a different answer from Kenneth Feinberg,' said Paul Hodgson, a compensation expert at independent research firm Corporate Library. 'On the other hand, I think what he's supposed to be looking at is not whether payments are excessive in size, but whether they are correctly structured and could encourage excessive risk taking.'
There may also be some questions about whether Mr Feinberg, who remains a partner at his law firm, has any conflicts of interest, though the disclosures in his ethics filing are far from damning.
According to his law firm's website, three of the institutions whose compensation he is supervising are clients of the firm or have participated in mediation with it: Citigroup's Citibank, AIG and Merrill Lynch, now part of Bank of America. But the ethics filing, which lists four dozen firms as sources of income, shows Mr Feinberg was a court-appointed 'neutral' mediator and did not represent the companies. - Reuters
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