AIG, GM Execs Forced To Take Pay Cut By Federal Government

WASHINGTON — Top executives at three companies bailed out by U.S. taxpayers during the 2008 financial crisis were ordered to take pay cuts by the federal government.

The Treasury Department says nearly 70 executives at American International Group Inc., Ally Financial Inc. and General Motors Co. had their annual compensation reduced by 10 percent. The CEOs of each company had their pay frozen at 2011 levels.

All three companies have yet to repay what they received from the $700 billion bailout and therefore are subject to pay cuts.

AIG still owes taxpayers around $50 billion. General Motors owes about $25 billion. Ally Financial about $12 billion.

Even with the compensation freeze, the chief executives are expected to be well paid this year.

General Motors CEO Daniel F. Akerson is expected to earn $9 million in stock and salary this year. Ally Financial's CEO Michael A. Carpenter is set to earn $9.5 million in total compensation. AIG CEO Robert Benmosche will make $10.5 million.

Akerson has criticized the pay limits, saying GM is losing some of its top talent in its executive ranks because of the government-imposed rules. The Detroit automaker received $49.5 billion from the government in 2008 and 2009.

"It's the reality we have to live with, as long as we're under the restrictions," said GM spokesman Jim Cain.

In a statement, Ally Financial said pay for its executives "continues to be in line with the stated guidelines" for bailed-out companies and the company is "squarely focused on delivering value for shareholders and repaying the remaining U.S. Treasury investment."

AIG declined to comment on the pay changes.

Comments

[OnceProudAmerican]

07:42 PM on 04/10/2012

It's funny that "We're loosing top talent" line of BS.
These are the same guys that ran companies into the ground!
If this is top talent then we are all ROYALLY SCREWED!
IS this the same Merit system they want to give teachers?
If so then Heaven help us!

[jr3houpe1849]

10:24 AM on 04/09/2012

What about the big banks taxpayer dollars were wasted on bailing the banks out pay cuts should have started at50% and gone uo from there

[Willie Qwit]

08:59 AM on 04/09/2012

Keep cutting the pay of these jerks. The fact that any of the top tier bozos at these companies earns over fifty grand is outrageous.

As a taxpayer I want my money back (back to the federal coffers, anyway, although back in my pocket would be even better).

[mmike1969]

04:31 AM on 04/09/2012

Executive pay cuts should of happened a LONG time ago and the US Taxpayers should not of had to wait years for this to have happened!

[ColoradoPete]

01:51 AM on 04/09/2012

Pretty soon the Federal government is going to turn the payscale around and claim that ALL public employees are underpaid and deserve RAISES to match the pay of these rescued companies.........Then Obama will get a raise to $10 million a year and all he can steal............

[Willie Qwit]

09:00 AM on 04/09/2012

Actually I think you have things backwards. If a Republican was president he'd be giving these executives 100% bonuses and extra pay and extra perks.

[HST]

11:37 AM on 04/08/2012

Hey, anybody know where I can get a job where I can screw up the company so bad it has to beg the government for money and get paid 9.5 - 10.5 million a year?

I could use a job like that and I'm willing to go as low as 8 million a year.

This is why I laugh at conservatives when they ask why do you want to "confisgate" throiugh higher taxes, money from people who "earned" it?

[nychaseter]

10:02 AM on 04/08/2012

I hope America has woken up to that "we lose top talent" argument that bankrupt companies use to try and give fat paychecks/bonuses to execs. If a company performs, Apple, Microsoft, etc, I think they abosultely should get their millions upon millions...bankrupt companies, like Kodak, American Airlines, ummmmm, not so much.

[ColoradoPete]

01:53 AM on 04/09/2012

Yet sometimes the work required, creativity required, risk taking required to turn around bankrupt companies is more than is required in your profitable examples. Usually new people are brought in - not letting the old people who brought down the company also try to turn it around.........just saying.

[Both Wings 2 fly]

08:34 AM on 04/08/2012

What about the banks and holding companies that blew a 7 trillion dollar hole in our budget? When are they going to be docked?
When are the hedge funds going to pay back the taxpayers?
When are we going to be able to stop the speculators(translates to banks), out of our gasoline, so we do not have to pay an extra dollar "tax" to the banks?
Sua Sponte

[KeyopsBack]

08:12 AM on 04/08/2012

Should have been a not In business anymore paycut. I was taught in school that when your business runs out of money you get shutdown. Privatized profits, socialized losses.

[NorquistNemesis]

03:23 AM on 04/08/2012

Should have been a 95% pay cut.

[wilsoncombatgrl]

01:33 AM on 04/08/2012

GM stands for Government Money. Give it back...and not off the backs of hourly workers either.

[PG812]

11:19 PM on 04/07/2012

The paychecks should be cut based on the following:

I really wanted to like the GM products that I saw at NY Auto Show on my press pass. After checking out the GM cars, I found that too many of them were disappointing. Misaligned interior trim and other imprecise alignments were not uncommon. The Cadillac sedans and new Chevy Impala and Chevy Volt were the exceptions--nicely executed. However, the Cadillac representative requested that I not open the hood on the new ATS, despite my press pass--it seems that it was a secret engine The Buicks were most disappointing with misaligned panels & trim. The cars may look good, but the devil is in the details. GM took the wholly separate North wing of Javits Center, far from the level where most passenger cars and some SUV's were, thereby making it more difficult to compare and contrast. It is as though GM was afraid of the inevitable comparisons. Thus, pay should be reduced until the deficiencies are corrected.

[angelavictoria5]

09:55 PM on 04/07/2012

Good Job!

[dragonladywaltham]

09:08 PM on 04/07/2012

My heart bleeds for all of them..........NOT!

[mjdloc157]

08:38 PM on 04/07/2012

so they still owe 75 billion in tax dollars. and Obama is calling that a success, no wonder they are pulling ahead of the competition, the obama administration is buying thier cars for the government fleet with our tax dollars, no bidding, and dictating what the salarys are, sounds like he "nationalized them like Hugo Chavez would

[HST]

11:40 AM on 04/08/2012

Why do you want to penalize all thoise CEOs who "earned" all that money?

(That's what repubs will tell you-lol)