How many professionals take on a highly visible thankless task for no pay not once but twice in the most challenging decade?
Kenneth Feinberg managed to create a program that persuaded 98 percent of the 3,000 victims’ families of 9/11 to stay out of court and instead apply to his fund while dispensing the $7 billion that seemed to satisfy almost everyone. Then, last year, he took on the job of administering pay for the executives of the failed businesses bailed out by taxpayers. Not only did he create a credible template but injected common sense in the way that executives are paid.
Directors could take a lesson.
Who but Warren Buffett could describe the current practice of a fictional greedy CEO engineering the approval of his rich pay package by engaging the compensation firm of “Ratchet , Ratchet and Bingo” to prove to the board that he is worth it? Buffett, the Chairman and CEO of Berkshire Hathaway , takes $100,000 in pay and say he would pay the company to do the job. “It’s a great job!” However, while he’s been running Berkshire Hathaway, the ratio of top pay to average pay at public companies has multiplied roughtly 11 times, from 24:1 to 275:1.
As Steven Brill conveys in his excellent profile of Feinberg in the New York Times Magazine, Feinberg shows himself to be a straight shooter, independent and fair.
That’s what most shareholders are asking directors to be–independent and fair.