Treasury: No pay raises for CEOs at GM, Ally

April 2, 2011

Treasury: No pay raises for CEOs at GM, Ally

Decision clears way for payouts at firms repaying TARP funds

Detroit News Washington Bureau
Washington — The Treasury Department’s special adviser overseeing pay at four firms that received large government bailouts said none of the CEOs will receive a pay raise this year. The administration’s pay czar ruled the companies won’t be able to raise the amount of cash they pay their top executives.
Patricia Geoghegan, the acting special master for executive compensation, approved the pay for the top 25 executives for the four remaining companies that received large bailouts: AIG, Ally Financial, Chrysler Group LLC and General Motors Co.
For GM, Ally and AIG — the CEOs will not receive a raise. Chrysler CEO Sergio Marchionne is paid by Fiat SpA, so he doesn’t come under the requirements.
The decision made late Friday night clears the way for millions of dollars in salary and bonuses to be paid out by companies that are still repaying the billions in aid they received during the financial crisis from the government’s $700 billion Troubled Asset Relief Program.
GM’s new 13 executives in 2011 saw cash compensation fall $223,000, or 2.8 percent, and total direct compensation decreased $8.4 million, or 20.4 percent, from 2010.
At Chrysler, pay for the top 24 executives increased $325,000, or 4 percent, and total direct compensation increased $2.4 million, or 15.1 percent. None got over $500,000 in cash, and just two make more than $1 million in total compensation.
Detroit-based Ally CEO Michael Carpenter will again make $9.5 million, including no cash.
In total, 82 percent of the pay for the top executives — the same percentage as in 2010 — including target incentives, is in the form of stock, tying the ultimate value of the compensation to company performance.
Executives don’t receive all of the stock until three years after it is awarded. More than 75 percent of 98 covered executives at the four companies make $500,000 or less in cash.
Overall, the cash compensation for these 98 individuals decreased 18.2 percent; their total direct compensation decreased 1.3 percent from 2010 levels.
For the individuals in the “top 25” in both 2010 and 2011, cash compensation increased 4.7 percent and total direct compensation increased 4.4 percent.
For the individuals new to the “top 25” group for 2011, cash compensation decreased 39 percent from 2010, and total direct compensation decreased 9.6 percent from 2010.

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