2nd UPDATE: AIG, GM, Ally CEO Pay Packages Frozen At '11 Levels-Treasury
April 06 2012 - 4:18PM
Dow Jones News
The Treasury Department rejected some salary increases requested
by General Motors Co. (GM) as it froze top pay packages at three
companies that received exceptional assistance during the financial
crisis.
Overall chief executive compensation at GM, American
International Group Inc. (AIG) and Ally Financial Inc. in 2012 will
be unchanged for the second straight year, the Treasury said.
Companies receiving exceptional assistance through the Troubled
Asset Relief Program agreed to submit pay proposals for top
executives to a Special Master for Executive Compensation as part
of their bailout terms. The special master, Patricia Geoghegan,
rejected some cash salary increases requested by GM, and made
modifications to packages at all of the companies.
"After reviewing GM's proposal, the Office of the Special Master
has determined that in certain cases the full amount of the
proposed increases was not justified," Geoghegan said in a letter
to GM.
Letters to the companies don't detail what was requested or how
much any package was altered.
Congress and the White House had wanted to cap salaries at
$500,000 for the seven companies that received the most aid during
the financial crisis. AIG, GM and Ally are the last three remaining
in the program.
While the reports out Friday don't list any names, they show
that some compensation packages are well above that level for the
top 25 executives at the companies.
The top salary at AIG, for example, is $10.5 million in cash and
stock. The lowest among the top 25 executives is $700,000 in cash.
Robert Benmosche is AIG's president and chief executive.
Ally's pay packages range is from $9.5 million--all in stock--to
$1.93 million in cash and stock. Michael Carpenter is Ally's chief
executive.
And at GM, salaries range from $9 million to $1.24 million in
cash and stock. Daniel Akerson is GM's chairman and chief
executive.
AIG and GM didn't immediately respond to requests for
comment.
An Ally spokeswoman said the company's executive compensation is
in line with the guidelines for TARP companies. "The management
team is squarely focused on delivering value for shareholders and
repaying the remaining U.S. Treasury investment," said Gina
Proia.
While CEO pay was frozen, overall pay for other top executives
shifted. A group of 69 executives--the top 25 at each company minus
six departures since Jan. 1--saw overall compensation decrease 10%
from 2011 levels.
The decrease reflects, in part, the departure of some
higher-paid executives in 2011. For the individuals in the top 25
in both 2011 and 2012, total direct compensation--cash and
stocks--decreased 2%.
AIG, GM and Ally are the only three left out of the original
seven companies that received exceptional TARP assistance where the
government still owns a stake.
The Treasury invested $68 billion in AIG, $50 billion in GM and
$17 billion in Ally.
Companies that have exited the bailout program are: Bank of
America Corp. (BAC), Citigroup Inc. (C), Chrysler Group LLC and
Chrysler Financial.
-By Jeffrey Sparshott, Dow Jones Newswires; 202-862-9291;
jeffrey.sparshott@dowjones.com
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