Obama’s Master of Disaster

First Agent Orange, then 9/11 and now the “fat cats”: Lawyer Kenneth Feinberg will keep an eye on manager pay for the U.S. government. His skills are undeniable, but they are also limited.

“Special Master for Compensation” – Kenneth Feinberg is now entitled to this flowery title. The star Washington attorney was chosen by Barack Obama to watch over compensation packages for top managers like Vikan Pandit of Citigroup and Fritz Henderson of General Motors.

Feinberg thus becomes a symbolic figure in a heated debate. Since the decline of the U.S. economy, the American public has had little sympathy for millionaire managers, known popularly as “fat cats.” Congressional representatives are also up in arms: in return for their approval of the $787 billion economic recovery package, they demanded stronger controls over executive pay. Feinberg’s appointment comes in response to this demand.

His previous experience qualifies Feinberg for this position. He became known through his work on behalf of the victims of the 9/11 attacks. Feinberg himself had to determine exactly how much compensation each family was due – and took some fierce criticism because of that.

He also has previous experience with other sensitive subjects; he represented victims’ claims stemming from the government’s use of Agent Orange in Vietnam and was also engaged in determining the monetary value of the films depicting John F. Kennedy’s assassination.

Feinberg’s authority is, however, limited: he is empowered to examine the compensation received only by the managers of large corporations that receive government bailout funds – and there are currently only seven of those. Feinberg will thus be custodian over the disaster that befell the icons of the American economy.

For other companies, not much will change. Obama has said he wants to give investors a voice in determining executive pay, but they wouldn’t have the power to make binding decisions. The government will continue to shy away from direct involvement in matters of executive compensation even in times of economic crisis.

Feinberg will be known unofficially as the “compensation czar.” The term is reminiscent of the “car czars” of recent months who had to make decisions for assistance to failing automobile concerns. It was quickly realized that the current task would be too complicated for a single individual. The government will form a taskforce for compensation under the direction of Treasury Secretary Timothy Geithner. He will make the decisions about executive pay and Feinberg will carry them out. If there is insufficient government backing, Feinberg’s job will consist of little more than the fancy title.