Big pay cuts are coming to bailout firms
Filed under: Economy, Investing
The Obama administration plans to order companies that received huge U.S. government bailouts last year to sharply cut the compensation of their highest paid executives, according to a person familiar with the decision.The seven companies that received the most assistance will have to cut the annual salaries of their 25 highest-paid executive by an average of about 90 percent from last year, said the person, who spoke on condition of anonymity because it has not been announced.
This person said Wednesday that the Treasury Department will announce the deep pay cuts within the next few days.
Kenneth Feinberg, the special master at Treasury appointed by Obama to handle compensation issues at the seven firms getting exceptional assistance from the government's $700 billion financial bailout package, is making the pay decisions.
The seven companies are: Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.
Total compensation for the top executives at the seven firms will decline, on average, by about 50 percent, according to the person familiar with the administration's decision.
At the financial products division of AIG, the giant insurance company that has received taxpayer assistance valued at more than $180 billion, no top executive will receive more than $200,000 in total compensation, the person familiar with Feinberg's plan said.
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Reader Comments (Page 1 of 4)
10-21-2009 @ 4:26PM
matthew grant said...
GOOD! the junior thieves stole all they could, expected us to bail them out and as a business person could i expect that level of compensation if i ran a business into the ground? i think not!
let them eat cake!
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10-21-2009 @ 5:16PM
Lou said...
Let them eat scata!
10-22-2009 @ 8:48AM
Hank Mangels said...
It would do a lot more good to go after the unions. They have a lot more impact on the bottom line than a few executives.
10-21-2009 @ 4:31PM
lawdog said...
Will never happen. Just more hype from the hill to make us feel better about our government. The solution is simple - - STOP GIVING THEM MONEY. Let them fail.
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10-21-2009 @ 4:44PM
BigJerry said...
The Obama administration can not order a pizza let alone order banks to do anything! Nor do they have to, or want to.
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10-21-2009 @ 4:55PM
john said...
odd they didnt include goldman sachs or morgan stanley --two "banks" that would have sunk without the bailouts...
now goldman has a "pool" of 16 billion --and more to come--to distribute in "bonuses for 2009.
i guess bonuses are paid for wrecking our financial future in as big a way as possible-- the more u are guilty the more u get !!
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10-22-2009 @ 9:20AM
gleeminghope said...
You are right on, I am still trying to figure it out. I did some research on Goldman Sachs/George Soros. Just google it..
and found out that George Soros purchased 3,446 shares of Goldman Sachs in 2008 to bring up his shares to 18,000 or 40.63 holdings. Strange that he would be buying so much in the downturn..and then Goldman Sachs gets a $10 billion in TARP money..and oddly enough bingo..Goldman Sachs makes record earnings and record profits..record bonuses. What the heck. How can you go for broke one year and not even a year later..you are breaking profit/earning records. Something smells here and you need to google "George Soros" there is so much to find. Read..about him, he financially backed Obama and we all wondered where all the campaign funds came from. There is a huge connection..between Obama, Soros.. and Soros and Goldman Sachs. I think Soros owns Obama...
10-21-2009 @ 4:55PM
Mike said...
Think those 25 already have flights booked to China?
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10-21-2009 @ 5:00PM
FallofRome said...
Good to hear it! They should all become
GS employees. No stock, No bonus, only low pay. These bozos took outrageous chances to enhance their own paychecks at the expense of 15 million others. In real life, the gamble would have lost and they should walk away from the table broke...
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10-22-2009 @ 8:30AM
Annie said...
Next it will be those pitiful men who dribble a ball down a court or the actor who works for two months and collects twenty million, there is no end is there???
10-21-2009 @ 5:04PM
shaun said...
shouldnt have bailed them out..let them all sink ..imagine what we could have done with each person over 18 getting 100k ...i think that would have worked out better..instead we give the companies more money so they can pay more bonus checks..
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10-21-2009 @ 5:06PM
CAL said...
LAW DOG IS RIGHT ON. WANT SOMETHING FIXED, GET THE GOVERNMENT OUT OF IT.
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10-21-2009 @ 5:09PM
Pat said...
If these guys are that talented, they will land high paying jobs at competitor companies. Thus, the morans running the government will never get their money back for the taxpayers, but, that's ok they will just raise our taxes even more.
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10-21-2009 @ 5:16PM
Lou said...
God Bless You President Barack Obama!!! It's about time we had someone with guts to stop this insanity of executive thieve's bilking and robbing the so called "share holder owned" companies that have been bailed out by our tax dollars!!! This should have been mandated decades ago! These crooks are bilking our companies for decades, and I'll be damned if I'll sit still and watch these "people" continue their white collar criminal activity when my tax dollars bailed these companies out a year ago! Most of them should be thrown in prison with Bernard Madoff!
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10-22-2009 @ 9:22AM
Lynda said...
RIGHT ON!!!!!!!!!
10-24-2009 @ 12:20PM
wiley77 said...
yea, god bless his ignorant ways! he did it for power, you idiot! now obummer fires who he wants, dictates wages, but this is great to you because it didn't affect you. when hitler started the ovens, the jews turned their heads, because it wasn't them at the time. but wallaa! he finally bgot them to the ovens, just like your freadoms are being taken from you now. you think he's screwing someone else, but you are NEXT IDIOT!
10-21-2009 @ 5:23PM
bill said...
Why do you think they got the money anyway...it was to control them...and give them another enemy to crush and make the public think they are doing something wonderful.
If they were smart they would have put stipulations to the money...give a kid a bag candy and he will eat it..
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10-21-2009 @ 5:24PM
rob said...
hey Pat-- only a moron wouldn't know how to spell moron!!
and the rest of you who bellyache about the government sound just like limbaughettes. everybody wants no less government until they need a road paved or an airport expanded or FEMA to save them after their home that never should have been in a floodplain or next to the ocean gets destroyed. we pay less taxes than any other advanced nation in the world, so quit your griping!
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10-21-2009 @ 5:31PM
tom said...
Incredible. I'm not usually on the side of Government interfering with Big Business but not only do I agree with the Govt. on this issue, I think they nee to go WAAY Further.
I think any Company that received a Bailout from the Taxpayer should not be allowed to issue any Salary increases, raises OR Bonuses until the ENTIRE amount is fully repaid with interest per the Bailout agreement. I realize this might not be popular with those Businesses' employees, but they need to be reminded they would be part of the current unemployment statistics had it not been for the Taxpayer.
NO Bonuses, no raises, no increases, Period. Until it is paid back.
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10-21-2009 @ 9:30PM
Lomax said...
The same should hold true for the pay of Congressional and White House idiots. Their salaries should be cut by about 90% as well. They aren't even worth that much. Most of the problems that we are having today trace back to these morons.