The task of setting compensation is an emotionally and ethically grueling one, according to Kenneth Feinberg, the Treasury Department's executive-pay czar, who examined the challenges of his job in a March 2 address at McCormick Hall.
"What I find fascinating about this assignment is that compensation is a surrogate for worth -- it mirrors an individual's assertion of worth," he said.
In his speech, Feinberg described the intricacies of his current job: setting pay for the top executives at seven companies receiving government bailout money under the Troubled Asset Relief Program (TARP). It's a responsibility that relies partly on "an element of discretion," he said.
Feinberg provided several hypothetical examples to illustrate the moral tensions of his job. He would often take the perspective of an executive to show both sides of a situation.
Speaking as an executive: "'Mr. Feinberg, I'm entitled to $5 million, and that's what I am worth. It's not just that I want to have another mansion, or another car. ... This is a reflection of my relative place.' That makes the assignment very, very emotional."
This sort of ethical struggle was even more pronounced, Feinberg said, in his previous post at the Sept. 11 Victim Compensation Fund. There, his task was to assign compensation to those affected by the terror attacks, and he was "tortured" by the difficulty of these judgments. Speaking as a victim: "'Mr. Feinberg, my husband was a fireman, he died in the World Trade Center a hero. You're giving me $2 million. ... Why are you devaluing his life?'"
Despite the gravity of the topic, Feinberg added a touch of levity when talking about his stressful work.
"The law degree -- it's all right, it helped," he said, "but I would've been much better off with a divinity degree [dealing] with the 9/11 Fund."