US government to slash payouts to top executives

Oct 23 2009 by Alun Thorne, Birmingham Post

The US administration is set to order bailed out firms to slash their payouts to top executives.

Reports have suggested that the Treasury will tell seven firms that took billions of dollars of taxpayers cash that they must cut base salaries to their top 25 bosses by around 90 per cent, with overall packages, including bonuses, down by half.

Speaking today, the head of the panel that oversees the 700 billion dollar (£423 billion) bail-out to companies said the reports of a massive clampdown on executive pay were “real”.

The seven companies earmarked for a dressing down from Washington are Bank of America, AIG, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial.

All took a slice of taxpayers money as they struggled though the crisis.

Smaller companies and those that have repaid the government are to be exempt from the Treasury’s demands, reports have suggested.

Top bosses will also have to get permission from the government if they receive more than 25,000 dollars (£15,000) in special benefits including country club memberships, private planes and company cars.