Federal Pay Czar to Clamp Down on GM, GMAC, Chrysler, Chrysler Financial Exec Pay

Robert Farago
by Robert Farago

The Wall Street Journal reports that the new federal “pay czar” Kenneth Feinberg is about to cap the execs working for GM, GMAC, Chrysler and Chrysler Financial. Well, restructure or “renegotiate” their salaries, bonuses and benefits. As Dan Rather might say, what’s the frequency, Kenneth? Less obliquely, the four auto industry recipients, all of whom owe their existence to billion dollar blessings from the Troubled Asset Relief Program (TARP), must send Ken new exec pay, perks and bennies guidelines by August 13. At which time the man originally tipped to be President Obama’s Car Czar (mooted by a 25-member task force) will decide whether or not he likes their proposals. If he doesn’t . . .

Mr. Feinberg can’t rip up legal contracts. But he is expected to push firms and employees to renegotiate payments he deems too high, said people familiar with the Treasury’s plans. If that can’t be done, they said, Mr. Feinberg is expected to factor the amount of a contract into an employee’s overall pay and use that calculation to bring down total compensation. For instance, if an employee were legally guaranteed a $1 million bonus for 2009, Mr. Feinberg might subtract that amount from the employee’s 2009 base salary, or cut the employee’s future pay to compensate for that amount.

See? The feds can’t even be straightforward when they’re water-boarding the free market. Yes, I know: he who pays the piper gets to prevent a voter backlash that could end the government’s ability to intervene in private enterprise (via hundreds of billions of dollar in taxpayer funds) to save corporations from their own incompetence so that they don’t die and ruin the entire US economy. But still, what kind of nonsense is this? Or, for that matter, this:

Among the things he will examine is whether a firm’s compensation rewards risk, is comparable to that of peers and is tied to long-term performance. His decisions aren’t subject to appeal, and he is operating largely independent of the Treasury Department. Mr. Feinberg, an attorney, isn’t receiving government compensation for his work.

Czar by name, Czar by nature. To those employees whose dreams of a Utah ski house are about to die, we salute you.

Robert Farago
Robert Farago

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  • Robert Schwartz Robert Schwartz on Jul 27, 2009

    GM and Fiatsler are wholly owned subsidiaries of the US government. As such their white collar employees should be paid according to the General Schedule. Not enough, so what? They are going down and going down hard, and with our money. So why pay them.

  • Ronnie Schreiber Ronnie Schreiber on Jul 28, 2009
    # Robert Schwartz : July 27th, 2009 at 9:28 pm GM and Fiatsler are wholly owned subsidiaries of the US government. As such their white collar employees should be paid according to the General Schedule. Not enough, so what? They are going down and going down hard, and with our money. So why pay them. Actually, GS federal employees have a better benefit package than salaried GM workers. GS employees make about double the private sector avg.
  • JOHN One is for sale on an ebay car donation site.https://www.ebay.com/itm/305579991767?itmmeta=01HYHVJ49MCC6HEWQY5AX9MX85&hash=item4725fca2d7:g:k9cAAOSw5V5mThFw
  • Scott So they are losing hundreds of millions of dollars and they are promising us a “Cheaper EV”? I wonder how that will look and feel? They killed the Fiesta because they claimed that they couldn’t make a profit on them and when I bought the first one in late 2010 they couldn’t deliver the accessories I wanted for it! Then I bought a 2016 Fiesta ST and again couldn’t get the accessories for it I wanted. They claimed that the components were going to be available, eventually. So they lost on that one as well! I don’t care about what they say anymore. I’ve moved on to another brand.
  • Michael S6 CX 70 or 90 will not be on my buying list. Drove a rental base CX 90 and it was noisy and the engine noise was not pleasant. Ride was rough for a family SUV. Mazda has to understand that what is good for Miata isn't what we expect in semi luxury SUV. My wife's 2012 Buick Enclave has much better Ride and noise level albeit at worse gas millage. Had difficulty pairing my phone with Apple CarPlay
  • Michael S6 What is the metric conversion between one million barrels and the number of votes he expects to buy.
  • NJRide This could give Infiniti dealers an extra product maybe make it a sub brand
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