Pay Czar Cuts Salaries For 65 Bailout Executives
WASHINGTON — The Treasury Department said Friday that five big companies still living on federal bailout money will see cash salaries for some of their top earners limited in 2010 so that only five of those executives in this group will be making cash salaries above $500,000.
The Treasury Department said that would be a reduction from 65 officials in this group who sought cash compensation above $500,000 in 2009.
The five firms involved are General Motors and its financing arm GMAC, Chrysler and its financing arm Chrysler Financial and insurance giant American International Group.
These five companies are the only ones remaining under compensation restrictions supervised by Kenneth Feinberg, the Obama administration's pay czar.
On Friday, Treasury released Feinberg's rulings for 2010 covering officials at the five companies below the top 25 executives at each firm. Those officials received their compensation rulings from Feinberg last month.
Friday's rulings cover executives from 26 to 100 at each of the companies.
Treasury officials said that in this group, Treasury had gotten requests to award cash salaries above $500,000 for only five executives, down from requests received from 65 executives in this group last year.
Treasury officials indicated that those five requests had been approved for 2010. In December, Feinberg told reporters that he had allowed about 12 officials in the group of 65 to receive cash compensation above the $500,000 cap.
While these executives will have cash salaries capped at $500,000 this year, their total compensation can be much higher. However, that compensation must be paid in the form of stock with the executives only allowed to cash in those stock payments over a period of three years.
Feinberg structured the compensation packages in this manner in an effort to tie executive performance to the performance of the company.
The announcements Friday were the administration's latest effort to deal with outrage over lucrative pay provided to executives of bailed-out companies while the public struggles with stagnant wages and high unemployment.
Treasury refused to provide information on the size of the total compensation packages for the executives in the 26 to 100 group saying the law governing this compensation did not require this type of disclosure.
For the top 25 executives at each of the five firms, Feinberg told reporters last month that they would see their pay cut by 15 percent this year although even with those reductions, many of them will make millions of dollars when their stock benefits are added.
Feinberg's initial pay rulings were announced last October for seven companies that had received the most money from the government's $700 billion bailout fund. Since that time, Citigroup Inc. and Bank of America Corp. have paid back their government support and are no longer covered by the pay guidelines which only apply to companies receiving exceptional support from the bailout fund, known as the Troubled Asset Relief Program.
(This version CORRECTS pvs number to 65 sted of 69 executives and expands number of companies to five)