Report: Gov't allowed high pay at bailed-out firms
WASHINGTON (AP) — A government report Monday criticized the U.S. Treasury Department for approving "excessive" salaries and raises at firms that received taxpayer-funded bailouts during the financial crisis.
The Special Inspector General for the Troubled Asset Relief Program said Treasury approved all 18 requests it received last year to raise pay for executives at American International Group Inc., General Motors Corp. and Ally Financial Inc. Of those requests, 14 were for $100,000 or more; the largest raise was $1 million.
Treasury also allowed pay packages totaling $5 million or more for nearly a quarter of the executives at those firms, the report says.
Also noted: A $200,000 raise was approved for an executive of Ally's mortgage-lending subsidiary Residential Capital LLC just weeks before ResCap filed for bankruptcy protection. Ally was GM's financial arm until it was taken over by the government in the bailout.
"We ... expect Treasury to look out for taxpayers who funded the bailout of these companies by holding the line on excessive pay," said Christy Romero, the special inspector general for TARP. "Treasury cannot look out for taxpayers' interests if it continues to rely to a great extent on the pay proposed by companies that have historically pushed back on pay limits."
The report says Treasury bypassed rules under the 2008 bailout that limited pay. Treasury approved raises that exceeded pay limits and in some cases failed to link compensation to performance, it notes.
Romero said the guidelines say compensation should not exceed the 50th percentile of pay for executives in similar positions at other financially distressed companies.
Business Photo Galleriesview all
- 36331Oklahoma tornadoes: The 'Big Dog,' the little boy and the hug that triumphs over tragedy
- 15449Bradley Cooper, Zach Galifianakis, Ed Helms drink in success of 'Hangover' series
- 9864Oklahoma tornadoes: Woman meets the military officer who shared the clothes off his back
- 9824Hobby Lobby argues case before federal judges
- 9353Oklahoma tornadoes: Thunder reverses the role, takes a turn at cheering on the community
- 7992Blake Shelton's "Healing the Heartland" televised tornado benefit set for Wednesday at Chesapeake Energy Arena
- 7895Story behind the photo: Family members describe desperate search for one another after EF5 twister