During a candid discussion about his role as the federal government’s compensation czar, keynote speaker Kenneth Feinberg described his role in setting executive compensation for institutions that received substantial TARP funds. Though Mr. Feinberg agrees that, to an extent, his work is a “sideshow,” he made a compelling case that the true impact of his work has less to do with the companies that are subject to his mandate and more to do with those entities that voluntarily adopt his approach to executive compensation. According to Mr. Feinberg, companies have already taken note and are following course. He attributes this effect to two considerations: political cover and the anticipation of litigation arising from claims of excessive compensation.

As an aside, Mr. Feinberg explained that the most frequently used argument he hears in response to his suggestions – that the employee is irreplaceable and the company will not be able to function if he/she leaves – falls on deaf ears for two reasons: (1) the so-called “irreplaceable” employees already have left; and (2) he is skeptical that, given the state they are in, the companies have so many irreplaceable employees. Mr. Feinberg did say that the companies he is working with have been very cooperative and that he finds himself speaking with the, and not to them.