Auto Execs to Get Treasury Pay Cuts

The top management of several US companies and banks, including GM, Chrysler (together with their financial arms) and other five groups which received government bailouts this year (Citigroup, Bank of America, American International Group), will get a pocket blow today, as the US Treasury Department is getting ready to announce pay cuts for the executives of the respective companies.

According to a New York Times report, quoted by DetNews, the execs of the companies which received the most money will get their salaries reduced by some 90 percent compared to last year's salaries.

The source adds that the pay cuts will be replaced with stock options, which will be subject to selling restrictions. The aforementioned move will target the top 25 executives of the respective companies.

The rest of the management will also get pay cuts, averaging 50 percent of the total compensations, including bonuses. Even more, the Treasury Department will impose restrictions of the executives' perks. Consequently, all executives who seek to receive company perks in excess of $25,000 will have to go and ask for permission before the government.

And last, but not least, the US will change the way in which the executives receive their pay, aligning it with the financial well being of the company.

The plan has been drafted by Kenneth Feinberg, the man in charge of establishing the compensation for the companies which received financial aid from the US.