Czars and legality of creating policy

What has been strange to me is how one of Obama’s Czars, that has not been confirmed by the Senate, has the legal authority to dictate official policy?

The Pay Czar just got done announcing that he is setting the pay for some Corporate executives.  (Never mind the legality of the policy on its own merits dealing with contract laws). Then Obama later cames out and sound like “wow, that was a good idea” after the fact.  He has not said that he was the one enacting it.  But it was the Pay Czar doing it and he is just verbally approving of the policy after the fact.

Now don’t get me wrong.  I do believe that a Czar that has been approved by the Senate has some legal authority.  But the Pay Czar has not been Senate confirmed.

I have always known Presidents that use Czars to collect information, compile that information and provide the President with advice or plans for the President to sign.  This act seems to not have happened in that order.

I also know, much like the Eric Holder CIA investigation, this could be just being a sneaky way of setting up a fall guy. If this policy turns bad or a huge public backlash appears Obama could easily through yet another person under that bus for his own bad decision.

I also have not seen much on the News about this point.  Not even on FOX.

Please tell me where I am right or wrong.  I would like to know if there is any precedence for this action.