Tags : bailout, gfc, global financial crisis
US Government Plans To Sharply Cut Pay, Perks For Bailout Firms
Washington, D.C. (AHN) – The Obama administration has decided to sharply limit the salaries of top executives of companies that have received federal bailout funds, according to media reports relying on an official close to the plan.
The plan is due to be announced in the next few days by Kenneth Feinberg, the Treasury Department’s special master for compensation. It will cause total compensation for 175 executives to drop about 50 percent. Salaries would be cut an average of 90 percent.
The affected companies are Citigroup, Bank of America, American International Group, General Motors and Chrysler, as well as the financing divisions of the two automakers.
Any executive receiving special perks exceeding $25,000 would have to get permission from the government.
The proposal will especially impact the financial products unit of AIG. Pay there would be limited to no more than $200,000. The company previously committed to drastically cut the $198 million in bonuses promised to employees in that division.
Feinberg also is expected to demand governance changes that would split the positions of chairman and chief executive officer. In addition, boards of directors would have to create a committee to evaluate risk. Staggered boards would be eliminated.
Related posts:
