Interview With Rep. Brad Sherman - Administration's Pay Czar And Executive Compensation
Interviewer - Neil Cavuto
Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at email@example.com or call 1-202-216-2706.
MR. CAVUTO: A czar is heading pay, but not capping it, regulating salaries, but not controlling them. A very hot topic in the Capitol today, but every time the White House tries to explain what its new compensation master or salary sultan or whatever they're calling it will be doing, it takes great pains to say what one Ken Feinberg will not be doing. So why is Ken there at all? Well, Democratic Congressman Brad Sherman says because we need him.
For what, Congressman? What do we need this guy for?
REP. SHERMAN: I'm not sure he adds much except by calling him a czar we get the impression that we're really controlling executive compensation at all these companies that have received our money. The fact is I don't think there's going to be effective caps. And the czar is only focusing on about seven companies out of the 100 that have received huge infusions of cash. Frankly, I think the American people want to see limits, not on all executive pay, but on executive pay of companies that would be in bankruptcy today if it wasn't for the taxpayer taking the risk. And my guess is --
MR. CAVUTO: Does that mean, Congressman, that those that have paid that money back or just those that are still on the dime?
REP. SHERMAN: Give us back the money and you get your freedom, do whatever you want after that, subject, of course, to soundness regulation. But we shouldn't be --
MR. CAVUTO: But it sounds like you would be erring on the side of caps where the administration is saying no. But I'm not sure what this czar is going to do, Congressman, because if they're saying, no, he's not a cap guy, he's not even a salary range guy, he's just sort of a watching-pay guy, I don't understand what the heck kind of guy he is.
REP. SHERMAN: At a minimum, if somebody gets a contract that says, you get a $1 million bonus if you screw up the company, he'd probably invalidate that kind of contract. But in terms of a contract that says, you get a $2 million salary and a $2 million bonus, I would suspect that would go forward. I think the American people want capitalism. But if we're going to have socialism for some companies, they don't want capitalism for the executives of those companies.
MR. CAVUTO: Congressman, I should just mention to our folks at home, we did call Ken Feinberg's office. But being a czar, you know, he's free not to return any of those calls, and that's exactly what he did, he didn't return our call. Let me ask you, Congressman. To this issue of czars not really accountable to you guys in Congress, just to the president, and obviously not the media, and especially me -- and that could be personal, but I don't think it is -- but what do you make of that? Does it bother you on any level, regardless of party affiliation, that you've got czars, like this pay czar and these other ones, popping up all over the place, and they really don't have to answer to you?
REP. SHERMAN: Well, if they change the name to adviser or monitor, then we wouldn't be making such a big deal out of it. I think the word "czar" has been cheapened to the point where there are people in --
MR. CAVUTO: Well, what word would you have come up with, if not czar? Despot? What would you have called him?
REP. SHERMAN: I think he's a mere monitor. I don't think he's a czar in any way.
MR. CAVUTO: You know, that's a very good idea. I think monitor would have been a much easier sell. Sixteen monitors sounds a lot better than 16 czars, you know what I'm saying?
REP. SHERMAN: Well, what you want to do is create the image that you're doing something really big and really tough. You especially want to do that when you're doing far less than the American people want you to do. And the way to do that is to take your monitor and give them the title "czar." I look forward to --
MR. CAVUTO: But you're a great student of history, Congressman, and you know how it worked out for the last czar. And I know you have influence in Washington. Did you ever tell anyone in the White House, hey, guys, not good, the czar thing?
REP. SHERMAN: Well, people like being czars. Hundreds of years of unchecked power and opulence followed by one execution -- overall, it worked out pretty good for most of the czars. But getting back to executive compensation, our hearings today focused on say on pay where we let the shareholders vote on executive compensation. I think that makes a lot of sense, and it ought to be a binding vote, not just an advisory voted, because we ought to have real capitalism, not crony capitalism. We ought to have the shareholders really in control of the corporation.
MR. CAVUTO: All right. Well, now you're going to have a couple of czars on your case. But you have a great sense of humor, so maybe you can make them laugh and they'll run away. Congressman, always good having you. Thank you very, very much.
REP. SHERMAN: Good to be with you, Neil.