Feds, lobbyists and Wall Street all are in the salary spotlight.
Suddenly, people's pay has emerged as Topic A from Main Street to Wall Street and from K Street to the halls of official power in Washington. Debate about skewed distribution of income and wealth generally has been framed in abstract terms. Now everyone seems focused on the actual numbers in the compensation packages of people-from lofty hedge fund barons to modestly paid GS-12s in the federal government. Corporate pay practices have emerged as an important public policy issue, and income inequality has newfound visibility in our times of wrenching unemployment.
You know pay is an issue when commentators, politicians and USA Today suddenly are claiming the average federal lawyer or nurse is making more than their counterparts in the private sector. Never mind that the Federal Salary Council declared last fall that an average raise of 26 percent in 2011 would be needed to catch up with private sector pay rates. In March, Office of Personnel Management Director John Berry appointed a new task force to validate public-to-private comparisons.
Federal salary critiques might resonate on cable television, but it's a penny-ante debate when you consider the earnings of others in the spotlight. The billion-dollar payouts to hedge fund managers now make the front page. Top executives' compensation in the seven companies that took federal bailout money have been subject to scrutiny and limitations by federal pay czar Kenneth Feinberg, who has pressed for tying pay to long-term performance instead of short-term profits. When Goldman Sachs chief executive officer Lloyd Blankfein took a $9 million bonus for 2009, half what might have been expected and mostly tied to stock performance, he was praised as having heard the call for greater restraint.
Inside the Beltway, the pay drama heated up when Rep. Barney Frank, D-Mass., banned his staff from communicating with a former top aide, now a highly paid lobbyist for financial industry players that Frank regulates. As coverage of Frank's edict unfolded, the press reported that former staffers typically are paid up to $600,000 a year to lobby and former members of Congress up to $3 million. Our sister publication National Journal in March reported that lobbyists earned a record $3.5 billion in 2009, recession notwithstanding. And in April, National Journal's biennial survey of salaries at nonprofit groups placed John Castellani, president of the Business Roundtable, at the top of the heap with $5.6 million. He's one of 89 trade group executives earning more than $1 million for their work, much of which is focused on influencing an increasingly activist government.
Many feds make their way into the ranks of high earners. It's a well-traveled route in such specialized fields as regulation of securities, food, drugs, communications, air and water pollution, highway safety, taxation and antitrust enforcement. With federal contracting now exceeding $500 billion a year, big firms like Booz Allen Hamilton have eagerly recruited such federal stars as former National Intelligence director Mike McConnell, former Internal Revenue Service executive Dave Mader and recently retired intelligence community human capital chief Ronald Sanders. Former Homeland Security Secretary Michael Chertoff and retired CIA director Michael Hayden have formed their own firm, and the market for senior military officers remains robust. Three former Energy Department leaders-James Decker, David Garman and John Sullivan-not only have established a successful post-government firm, but also are preparing to teach senior executives how to position themselves for private sector success after retirement.
These former feds don't enjoy the huge pay days of Blankfein, Oprah, Tiger or Lady Gaga, but their careers show that the public sector offers plenty of honorable paths to a very decent living.