U.S. slashes pay at seven bailed out firms, cuts cash up to 90 percent
WASHINGTON, Oct 22 (Reuters) – The U.S. Treasury’s pay czar on Thursday slashed overall pay by more than half for top earners at seven companies that received massive taxpayer bailouts, and ordered that most of their salaries be paid in the form of long-term company stock. Kenneth Feinberg, charged with approving or renegotiating pay contracts for the 25 highest-paid employees at the seven banks and automakers, said their cash compensation for 2009 would drop by more than 90 percent compared to 2008.
“I am extremely sensitive to the public outrage about this,” Feinberg told reporters.
He said that without exception, all of the pay plans that the firms submitted were inconsistent with the public’s interest.
Feinberg’s long-awaited pay rulings will apply largely to November and December. However, because those months determine the year-end bonuses that make up a large chunk of pay in the financial sector, it will have a profound effect on the earnings of the five top executives and 20 other highest-paid employees at each of the firms.
In all cases, Feinberg capped base cash salaries at $500,000 and ordered that the remainder of salaries be paid in company stock that must be held for the long-term.
Below are key details of his rulings for individual firms:
AMERICAN INTERNATIONAL GROUP:
Cash salaries for the top 25 earners for 2009 will be cut by 91 percent from 2008 levels. Total direct compensation will fall 58 percent from 2008 levels.
BANK OF AMERICA:
Cash salaries for the top 25 earners for 2009 will be cut 94 percent, total direct compensation will fall 62 percent.
CHRYSLER GROUP LLC:
No specific percentage cuts were listed. Base salary should not exceed $500,000 per year, except in appropriate cases for good cause shown.
Cash salaries for the top 25 earners will be will fall 30 percent; total direct compensation will fall 56 percent
Cash salaries for the top 25 earners will be cut 96 percent, totoal direct compensation will be cut 70 percent;
Cash salaries for the top 25 earners will be cut 31 percent, total direct compensation will fall 20.4 percent.
Cash salaries cut for the top 25 earners will be cut 50 percent, total direct compensation will fall 86 percent.
(Reporting by Karey Wutkowski and David Lawder, Editing by Chizu Nomiyama) ((firstname.lastname@example.org; +1 202 898 8395; Reuters Messaging: email@example.com))