Obama administration to cut compensations for top level executives at GM, Chrysler

Posted: Oct 21, 2009
Filed under: Chrysler, GM, Industry News

President Barack Obama

According to people familiar with the plan, the Obama administration plans to order companies that received large government bailouts last year to sharply cut compensations for their highest-paid executives. A total of seven companies will be asked to cut annual salaries of their 25 highest-paid executives by an average of about 90 percent form last year.

Sources say that the U.S. Treasury Department will announce deep pay cuts within the next few days.

Pay czar Kenneth Feinberg will handle compensations issues at the seven companies that may include Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors Co., GMAC, Chrysler and Chrysler Financial.

People familiar with the matter said that total compensation for top executives will decline on average by 50 percent.

- By: Stephen Calogera

Source: Free Press
Image Source: Flickr

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  • Gekke Henkie
    90 percent? Short-sighted and stupid. I presume that not all the 50 executives (GM and C together) will still work there in a year from now and then: good luck finding replacements if you pay 10% of your competitors. They will end up saving money in the short run, but the major gaps that will rise in continuancy will eventually cost more in the long run. Just 'popular' politics if you ask me; but don't :)
  • zermatt
    While I am a firm believer in market based compensation, GM and Chrysler brought this on themselves.

    If the pay cuts do anything it should motivate all TARP recipients to get out from under the government overlords - the sooner the better. Until GM and Chrysler get out from under I will not be buying any of their products.

    Go Ford.
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