Guess Who Was Behind Excessive Pay Packages at Some Bailed-Out Companies
A government auditor harshly criticized the Treasury Department for approving “excessive” pay packages for top executives at three companies that received large government bailouts.
Christy Romero, the special inspector general overseeing the $700 billion Troubled Asset Relief Program, criticized the Treasury for approving pay raises at General Motors Co., Ally Financial Inc. and American International Group Inc.
The report released Monday was critical of the Treasury’s special master overseeing executive pay at companies that got very large bailouts: Cash salaries of $450,000 or more were approved for 94 percent of the top 25 employees each at AIG, GM and Ally.
“While taxpayers struggle to overcome the recent financial crisis and look to the U.S. government to put a lid on compensation for executives of firms whose missteps nearly crippled the U.S. financial system, the U.S. Department of the Treasury continues to allow excessive executive pay,” the report said.
The executives at GM, Ally and AIG “continue to rake in Treasury-approved multimillion-dollar pay packages that often exceed guidelines” previously announced, the report said.
AIG repaid its government bailout in December and is no longer subject to the pay restrictions. Initially seven companies — including Chrysler Group LLC, Chrysler Financial, Citigroup Inc., and Bank of America — were covered by the restrictions.
Patricia Geoghegan, the Treasury’s “pay czar,” agreed to shift more pay away from longer-term incentive pay. She removed long-term restricted stock for senior executives, including the CEOs of AIG, GM and Ally. In total, she removed long-term restricted stock from 24 of the 34 employees’ pay packages and for all but one of the 24 employees, replaced it with stock salary, as requested by the companies.
In total, she approved pay packages worth $5 million or more for 23 percent of the top 25 employees at AIG, GM, and Ally — nine at AIG, three at GM and four at Ally.
Barack Obama, it should be remembered, has gotten a lot of populist mileage out of his criticism of excessive pay packages. Funnily, however, I don’t recall him blaming Tim Geithner in any of his speeches denouncing large executive payouts.