Treasury to Freez Pay for CEOs at GM, AIG,Ally Financial

by Fiona Gabriel | Friday, Apr 6, 2012 | 462 views

Giving the alibi of the period of the financial crisis when the companies  were given help during the “exceptional “ bailout , the Treasury Department had the compensations ; which includes a variable mix of cash and stocks besides stock options as the part of the overall package ;  of the chief executives of firms like AIG , General Motors and Ally Financial  frozen for 2012 , which makes it  twice in a row .

The Department informed that all the above mentioned firms were progressively returning the tax payer funds lended to them to prevent them from demolishing at the time of financial crisis , still they shall remain under scrutiny as long as they do not  pay it back completely.

Even though the Treasury made minor changes to the share holdings , cash and the long-term stock for the CEO’s , their overall compensation still stood at the level of 2011.

At  the time of the crisis , $68 billion had been pumped into AIG , while investments worth $50 billion were made into General Motors  to save the tragedy struck firms . All the money had been fueled from the Troubled Asset Relief Program. They were a part of the seven firms which has seeked helped and to whom the taxpayer- financed money was lent . Citigroup , Bank of America , Chrysler Financial and Chrysler group have repaid their  share from the TARP .

Besides the freezing of the compensation for CEO’s , the compensation for almost 60 senior level executives was slashed down by 10% for the year 2012.

Since the money was used from the taxpayer – funded accounts , the high pay of the executives and sky high bonuses had resulted in public outrage  following which the Obama government had to start a new “ special master office “ to monitor the whole process .

The top executive of AIG , Robert Benmosche will recive ; as cash , stock and futures ; a compensation of $10.5 million while Michael Carpenter from Ally Finacial , will receive $9.5 million  and GM’s Daniel Akerson is set to receive $9 million as his compensation. Even though the document doesn’t mention the names of the executives but evidently the three CEO’s will still enter the elite group of income earning Americans.

Among those who will see their paychecks trimmed down at the three firms will be senior executives and those whose compensations rank in the high brigade .

All the three firms have maintained that their executives are receiving compensations according to the guidelines set by  Treasury for the TARP firms and that their main aim was to return the amount left into the TARP funds.

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