Two days ago one of GM’s chairmen, Ed Whitacre, said that it has become difficult for GM to hire competitively due to government-imposed pay restrictions. Today, White House pay czar Kenneth Feinberg addressed this issue with mixed messages – both acknowledging the need to be competitive and defending the concept of limited pay.
Feinberg is responsible for managing the pay at seven firms which received taxpayer bailout funding – including GM and Chrysler . Last month Feinberg ordered pay and bonuses be cut in half (on average) for the top 25 earners at the seven firms. These cuts affected GM, GMAC Financial Services, Chrysler Group and Chrysler Financial.
Despite Whitacre publicly speaking out against the current pay restrictions, Feinburg told a crowd at a Bloomberg sponsored forum that none of the automotive firms have formally appealed his rulings.
Later, Feinberg said, “If General Motors or any other company wants to bring someone in laterally – laterally – and competitive pay packages require that lateral hires get certain competitive pay, what have you, we’re perfectly willing to examine that.”
Feinberg’s clarification as to what would be negotiable does not appear to include anything other than a lateral move. Feinberg defended his pay restrictions as finding a balance between reining in excessive pay and allowing companies to thrive and eventually repay the government for the bailout loans.
