When two icons of the CR movement addressed the CROA, sparks flew.

In April—before federal pay czar Kenneth Feinberg was named to oversee the BP escrow account and before former Governor Eliot Spitzer landed a prime time talk show on CNN—the pair joined CR Magazine Editor-in-Chief Dirk Olin in Boston for the Spring Summit of the Corporate Responsibility Officers Association. What they had to say about redressing the financial crisis, realigning the C-Suite, and retuning the political economy is not to be missed. For an excerpt of their remarks, read on. To watch a video of the event, click here.

Olin: Ken, maybe you can start by talking about the history of this special master concept and the social and political place that it resides in—your current role as against some of the other applications of this role.

Feinberg: Three quick, early points.  First, everybody now claims to be hammering away on Wall Street, all sorts of books have been written about the causes.  I just want everybody to understand that more than any other individual, Eliot Spitzer saw it coming, criticized it back before it was fashionable, and now I think has as much, if not more, credibility on the topic than anybody in America..

Spitzer: And look where it got me.

Feinberg: I would have thought my role would have been controversial.  It’s not.  There is no controversy surrounding my role, why is that? I only have jurisdiction delegated to me by Congress through the Secretary of the Treasury, originally for seven companies.  The top 25 officials in just seven companies: Bank of America, CitiGroup, AIG, GM, GMAC, Chrysler, and Chrysler Financial.  Bank of America and CitiGroup repaid the tax payout, every dime owed.  They’re out from under my jurisdiction.  Now I’m left with five companies.  It really is not controversial, why?  The American people own those companies.  So the general prevailing view in Washington, Republican and Democrat, Liberal and Conservative, red state and blue state.  We own them; we have every right to say what they make at the top level of those companies.  So that’s the second point.  The third point, Congress delegated to the Secretary of the Treasury this authority to actually determine pay but only for the top 25 people in the companies.  The Secretary of the Treasury, through regulations creating a special master or a treasury official determines the pay.  That’s why there is so much interest in what I do.  I actually liquidate the amounts and determine what these top officials are going to get.  So it’s a very circumscribed jurisdiction that I have, very limited.  I don’t think it should be expanded and that’s why, contrary to Jay’s hype, it’s really not controversial.  As long as it’s limited, to this role with the American people as taxpayers as creditors of these five remaining companies.

Spitzer: I was going to disagree a little bit actually.  I’m not suggesting it’s controversial.  I think you’re exactly right about that, but I think you understate the importance of what you’re doing because what you have done is intervene in an area, yes the predicate for governmental bar-setting and establishment of particular norms is limited, but you’re sending ripples in a very affirmative and effective way into a debate that has been triggered not only in the economic cataclysm but by a brewing sense over the last five or ten years, whether it’s looked at in terms of a ratio or in dollars.  Pay issues had somehow wandered out of the boundary lines of rational determination.  And so I think what you have done by recreating markers, is critically important and will continue to provide reference points beyond the seven, now five, and ultimately zero companies.  Your modesty is a little bit false, and I think we all understand that what you’re doing is really redefining the playing field.

Olin: The other point I would add and ask you to address is that the caveat or the proviso be placed on the non-controversial aspects of your role, was that the role would remain circumscribed.  I think part of what we’ve been seeing for the last six to nine months with the Tea Party brigade and what have you, is precisely that certain people aren’t sure it will remain circumscribed.  Which is why you have these histrionics about creeping socialism and on and on.

Feinberg: There is nobody out there I can see, not in the Congress, not in the White House, not in this administration, certainly not the Secretary of the Treasury who wants to see my jurisdiction expanded.  I don’t think I should expand my jurisdiction.  And there may be critics out there worried about that, but that worry is false.

Olin: What about the fear that good people will leave?

Spitzer: In the famous quote from DeGaulle, “the graveyards are filled with indispensible men.” You hear this rhetoric whenever people begin to talk about executive comp.  “Oh my goodness if we bring down comp we will lose these critical employees.”  You hear it on Wall Street in particular. “We will lose these critical employees without whom our company will implode.” And then you scratch your head and say, “Wait a minute, let’s take a look at the last two years.”, It’s kind of hard for me to see how many of these folks could really be indispensible.  And yet, we haven’t seen any shift in sort of base pay or aggregate numbers.  So how do you deal with that?