Implications of Kenneth Feinberg, to oversee compensation packages
The appointment of Kenneth Feinberg as a compensation czar had both good and bad implications. One of the good implications was that he was able to implement the new legislation on how executives’ pay would be administered. This was to be executed in all the firms that received federal bailout. Critics insist that his appointment should have been vetted by the Senate. There is also huge controversy surrounding his pay. Some of the short-term effects of his appointment included the ability to control the financial crisis that was facing those companies. As a long time measure, shareholders would be able to voice their opinions in the pay of the executives in their companies. The shareholders would also be able to vote on the directors’ executive pay. This compensation package ensured that employees, in a few companies, were able to keep their jobs. There was also regularization of executive pays in most of the companies.
Principles violated to do his job
This is seen as an intrusion by the government on how companies compensate their employees. It means that the executives have little incentive to move from one firm to another as the pay bracket is similar. To get information on firms that have extremely high packages he will have to violate the privacy of this companies and their executives. That information is made public and for an individual his right of privacy is violated.
Virtues and Vices of a Compensation Czar
Virtues of a good compensation czar are that he should be selfless and able to define all the facts, and conform to requirements in order to make sound business decisions. He should also be able to make decisions based on sound ethical judgment.
Maximum and Minimum wage
The government should set a maximum wage showing how much a person can legally earn. With this ceiling, a company is able to shield itself against financial risks, and prevent future crisis. This prevents the company from taking too many financial risks with the aim of making huge profits. Similarly, there should be a maximum wage ceiling just like the minimum wage cap that prevents people from being underpaid.