I am listening right now to a Committee on Oversight and Government Reform hearing on executive compensation entitled “How Much is Too Much?”
Kenneth Feinberg, the Special Master of TARP Executive Compensation, just finished his testimony.
First, am I the only one finding it horrifying to call someone “special master”? In fact, several times during his testimony he explained that if any of the seven banks wanted to increase the pay of their executives they would have to ask “the special master.”
While we can debate whether banks who received government funds through TARP should be free or not to do whatever they want now, there is no doubt that the limits the new owners are planning to impose will have dramatic consequences. Yet, Special Master Feinberg (sounds bad, right?) is absolutely denying the fact that the best employees in each of the companies targeted will be quitting. He admits that many top executives already have, but he claims we have no evidence that they left because of the upcoming limits on executive compensation. Whatever.
I do find the idea that one man, one special master, would be in charge of deciding what U.S. firms are allowed to pay their employees scary, especialy in light of Senator Schumer’s statement that this scheme should be extended to all publicly traded companies.
Thankfully, George Mason University and Mercatus Center scholar Russ Roberts is next to testify.