Obama seeks to control executive pay

The Obama administration named a “compensation czar” yesterday to set salaries and bonuses at some of the biggest firms at the heart of the economic crisis, as part of a broader government campaign to reshape pay practices across corporate America.

[efoods]Senior officials said they will install Washington attorney Kenneth R. Feinberg with the power to determine compensation, including retirement packages, of senior executives at seven firms that have received massive federal bailouts, such as Citigroup chief executive Vikram S. Pandit, Bank of America’s Kenneth D. Lewis and Fritz Henderson of General Motors.

The initiative reflects public uproar over executive compensation, which has been stoked by the financial crisis. Lawmakers who approved the government’s $700 billion bailout for the financial system last fall worried that taxpayers would end up financing the lavish lifestyles of top Wall Street executives. Then, controversy erupted in March when the Obama administration revealed that insurance giant American International Group, a recipient of a $180 billion rescue package, had decided to pay $165 million in bonuses to its most troubled financial unit.

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