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Obama Administration to Order Steep Pay Cuts for Bailed-Out Companies
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Published December 24, 2015
The Obama administration plans to order companies that received the most money from the $700 billion Wall Street bailout to slash pay to top executives, a government source told Fox Business Network.
Under the plan, the seven companies that received the most government aid will have to cut annual salaries by about 90 percent from last year for the 25 highest-paid executives.
The plan to order the steep pay cuts falls in line with plans pushed by administration "compensation czar" Kenneth Feinberg, according to the government source.
An announcement is expected from the Treasury Department within the next few days.
The seven companies are: Bank of America, American International Group, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial.
Total compensation for the top executives at the seven firms will decline, on average, by about 50 percent, according to a person familiar with the administration's decision.
At the financial products division of AIG, the giant insurance company which has received taxpayer assistance valued at more than $180 billion, no top executive will receive more than $200,000 in total compensation, the person familiar with Feinberg's plan said.
The administration also will warn AIG that it must fulfill a commitment to significantly reduce the $198 million in bonuses promised to employees in its financial services division, the arm of the company whose risky trades caused its downfall.
The pay restrictions for all seven companies will require any executive seeking more than $25,000 in special benefits -- things such as country club memberships, private planes and company cars -- to get permission for those perks from the government.
Feinberg's decisions on pay come after administration officials voiced sharp criticism in recent days of the plans of Wall Street firms to pay huge bonuses at a time when the country is still coping with rising unemployment and the effects of the recession.
Fox Business Network's Peter Barnes and The Associated Press contributed to this report.
https://www.foxnews.com/politics/obama-administration-to-order-steep-pay-cuts-for-bailed-out-companies