Legendary compensation lawyer Kenneth Feinberg is cautioning against heavy-handed government intervention in corporate pay practices. In an interview on BNN, Feinberg, now special master at the U.S. Justice Department, said a knee-jerk expression of outrage from either the federal or Quebec government would be ill-advised.
“Be careful of the government interfering with private pay decisions,” he said. “If you want, you can have the government insinuate itself into the private compensation process…it sends a signal that, ‘We will not stand idly by if compensation is increased without some sort of oversight.’”
Feinberg said the structure of any compensation is more important than the gross amount, as his experience overseeing the federal support for embattled U.S. firms emerging from the financial crisis indicates the key is to ensure compensation is geared to the long-term success of the company.
“You tie the fortunes of the corporate official to the overall fortunes of the company, and it’s incentivized - no short-term, quick hit, but longer-term compensation tied to longer-term performance.”