Pay czar to make us feel better?
As far as we know, the Obama administration doesn't have any Romanovs on staff, but the proliferation of czars in the employment of the president makes us wonder if the Russian royal family is making a comeback.
Yesterday, pay czar Kenneth Feinberg cut the pay for 175 employees at the top seven companies that received government assistance. AIG, Bank of America, Citigroup, General Motors, Chrysler, GMAC and Chrysler Financial, firms that received taxpayer help but have not paid the funds back were targeted by Feinberg, who was appointed this summer.
The pay czar has this power, and he is wielding it, demanding salary cuts of up to 90%, and total reductions, including stock and stock options, of 50%.
Smaller companies and those that have repaid the bailout money are not affected.
Welcome to the zany, post-financial meltdown world of taxpayer financed corporations.
With some signs of the economy and the stock market showing signs of a turnaround while jobless rates continue to climb, there are many that feel that the executives at these firms should be punished for forcing the government to intervene with tax dollars, become a de facto controlling partner.
Others feel that this action may have the opposite intended affect, driving away the people that can turn these companies around and return them to private ownership.
Still others feel that the government should regulate the pay of executives at large financial firms that indulge in risky practices that have the potential of bringing the entire financial system down.
We believe the administration is setting out to make an example of these firms and their top management, sending a message to Wall Street that if they don't behave, legislation may be passed to give the pay czar more power.
But that's an entirely different different issue. We would hope that these executives would want to everything within their power to repay the taxpayers and hopefully learn the lessons of a year ago.
The czars need to be accountable as well. Let's not cut off our noses to spite our faces. These pay cuts won't put anyone back to work.