Marchionne: Chrysler won’t ‘loosen the purse strings’ on executive pay as U.S. cap ends

Just recently, we’ve provided news that Fiat’s CEO Sergio Marchionne has increased their stake in the Chrysler Auto Group ridding the Auburn Hills make of its US and taxpayers’ ownership. This also means that executive pay restrictions imposed by the US government as part of the bailout program was also lifted. That said however, Marchionne made sure to notify the public that this does not mean executive pay will be increased.

“Assumptions that we’re going to start distributing cash indiscriminately are probably misplaced,” said Marchionne in a press conference call regarding Chrysler’s second quarter earnings.

During US and taxpayer ownership, Chrysler wasn’t allowed to pay executives more than $500,000. General Motors on the other hand remains under the same restrictions that Chrysler was under.

“The compensation restrictions are all gone,” Marchionne continued. “Chrysler intends to remain competitive on compensation, but will stay in line with an industry trend toward more restraint on pay.”

– By: Chris Chin

Source: Automotive News