White House to cut executives’ salary

    The Obama administration may have bailed out several companies earlier this year, but that may have been in exchange for some pay cuts.

     

     

     

     

     

     

    The Obama administration may have bailed out several companies earlier this year, but that may have been in exchange for some pay cuts.
     
    The Associated Press reports that the administration is telling seven companies to drastically cut the salaries of their top brass. 
     
    Bank of America Corp., General Motors, Chrysler and Citigroup Inc. have all been ordered to reduce executive salaries by 90 percent on average. A source said Wednesday that American International Group Inc., GMAC and Chrysler financial have to do the same. In addition, the companies must slash the executives’ overall compensation by half, so this might affect their benefits as well.
     
    Aside from that, AIG is also being prompted to severely cut back on the $198-million bonus it promised to its financial services division.
     
    The slashes in salary would only affect 25 of the highest paid people across those seven companies, which received the most aid. Firms like JPMorgan Chase & Co. and Goldman Sachs, that have repaid their bailout, won’t be hit by the decree.
     
    Although there has been no official announcement on this decision, the Treasury should be making a statement on it within the next few days.
     
    It’s not clear how much money the government will let each executive earn, but those at AIG won’t be making more than $200,000 total in annual compensation. And requests for any perks, like club memberships of private plane rides, would have to be cleared through the government.

     

     

     

    – Sonya Eskridge

     

     

     

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