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TARP Czar Says Taxpayers Won't Be Footing Pay Hikes for AIG, GM, Ally & Chrysler CEOs

Source: WSJ - Andrew Ackerman and Sharon Terlep

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Posted on 04 Apr 2011

The U.S. Treasury Department said Friday that taxpayers won't be footing the bill for pay raises for the chief executives at the four firms still receiving assistance under the federal bank bailout, which include American International Group Inc. (AIG), Ally Financial Inc., General Motors Co, and Chrysler Group LLC.

By law the compensation levels of the firms are reviewed annually by the pay czar for the Troubled Asset Relief Program (TARP.)) THe Treasury said there has been some modification for 2011 in the mix of stock salary and long-term restricted stock for the CEOs.

In separate letters to the four companies, Treasury lists the top salaries at each firm, without identifying the individuals by name. The top earner at AIG will make $10.5 million this year while the highest-paid executives at GM and Ally Financial will get $9 million and $9.5 million, respectively.

Robert H. Benmosche is the chief executive of AIG, while Dan Akerson and Michael Carpenter are the chiefs of GM and Ally Financial, respectively.

The top earner at Chrysler, listed only as employee No. 2, earned $1.2 million last year.

The Treasury said cash compensation levels for the "top 25" officials at the four companies will decrease 18.2% this year and total direct compensation will fall 1.3% from 2010 levels.

AIG and Ally Financial declined to comment. Chrysler couldn't immediately be reached.

At GM, Mr. Akerson has pushed for more leeway on executive pay, arguing that the limits are making it difficult to hire and retain qTaxpayers won't foot the bill for raises for the chief executives at any of the four firms still receiving assistance under the federal bank bailout, the U.S. Treasury Department said Friday.

The Treasury said the cash pay component for this year will be frozen at 2010 levels for the heads of American International Group Inc., Ally Financial Inc. and General Motors Co.

As in prior years, Sergio Marchionne, who is chief executive of both Chrysler Group LLC and Italian car maker Fiat SpA, will be compensated directly by Fiat.

By law the compensation levels of the firms are reviewed annually by the pay czar for the Troubled Asset Relief Program, or TARP. Treasury said there has been some modification for 2011 in the mix of stock salary and long-term restricted stock for the CEOs.

In separate letters to the four companies, Treasury lists the top salaries at each firm, without identifying the individuals by name. The top earner at

AIG will make $10.5 million this year while the highest-paid executives at GM and Ally Financial will get $9 million and $9.5 million, respectively.
Robert H. Benmosche is the chief executive of AIG, while Dan Akerson and Michael Carpenter are the chiefs of GM and Ally Financial, respectively.

The top earner at Chrysler, listed only as employee No. 2, earned $1.2 million last year.

The Treasury said cash compensation levels for the "top 25" officials at the four companies will decrease 18.2% this year and total direct compensation will fall 1.3% from 2010 levels.

AIG and Ally Financial declined to comment. Chrysler couldn't immediately be reached.

At GM, Mr. Akerson has pushed for more leeway on executive pay, arguing that the limits are making it difficult to hire and retain quality executives.

The auto maker requested that it be allowed to increase cash compensation for some top executives and be able to increase the number of executives who exceed a $500,000 pay cap, according to people familiar with the situation.

A GM spokeswoman said the auto maker "worked closely" with Treasury officials to explain why some easing of restrictions would help. In many, but not all, cases the company got the leeway it wanted, she said. Nine executives are able to exceed the $500,000 pay cap this year, compared with seven in 2010.

The Treasury reduced its GM stake to 26.5% from 61% in the auto maker's November initial public offering. "We sold half the government position in the company," Mr. Akerson said afterwards. "There ought to be a new perspective."


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