The huge salaries and bonuses paid to executives of banks and other firms that received government bailout funds have been the subject of a lot of taxpayer rage. The Obama administration listened, and will order pay cuts.
Affected companies are Citigroup, Bank of America, AIG, GM, and Chrysler. Executives from the latter two companies’ financing arms are also included.
The program will lead to pay cuts of up to fifty percent for each firm’s top twenty-five earners.
The plan will hit executives at some companies harder than others. At the financial products division of A.I.G., the locus of problems that plagued the insurer and forced its rescue with more than $180 billion in taxpayer assistance, no top executive will receive more than $200,000 in total compensation, and officials in that unit will not receive any other compensation, like stocks or stock options. Some bonuses previously promised will be paid in the coming year, and it is not clear how much of those will be awarded.
But at other companies, the cuts may mean less. Many executives at Bank of America and Citigroup are expected to reap multimillion-dollar pay packages.
For executives at all seven companies, new restraints will also be imposed on perks. Any executive seeking more than $25,000 in special perks – like country club memberships, private planes, limousines or company-issued cars – will have to apply to the government for permission.
Yes, a Washington bureaucrat will be rationing executive limousines. The horror!