Executives at bailed-out firms have to take pay cut
Top executives at three companies bailed out by U.S. taxpayers during the 2008 financial crisis were ordered to take pay cuts by the federal government.
The Treasury Department says nearly 70 executives at American International Group Inc., Ally Financial Inc. and General Motors Co. had their annual compensation reduced by 10 percent. The CEOs of each company had their pay frozen at 2011 levels.
All three companies have yet to repay what they received from the $700 billion bailout and therefore are subject to pay cuts. AIG still owes taxpayers around $50 billion. General Motors owes about $25 billion. Ally Financial about $12 billion.
Even with the compensation freeze, the CEOs are expected to be well paid this year.
General Motors CEO Daniel Akerson is expected to earn $9 million in stock and salary this year. Ally Financial's Michael carpenter is set to earn $9.5 million in total compensation. AIG's Robert Benmosche will make $10.5 million.
Akerson has criticized the pay limits, saying GM is losing some of its top talent in its executive ranks because of the government-imposed rules. The Detroit automaker received $49.5 billion from the government in 2008 and 2009.
In a statement, Ally Financial said pay for its executives "continues to be in line with the stated guidelines" for bailed-out companies.
AIG declined to comment on the pay changes.