Compensation for chief executives at AIG, Ally Financial and GM -- all of which received exceptional TARP assistance during the financial meltdown -- is being frozen at last year's levels, the Treasury Department said.
The ruling from Patricia Geoghegan, acting special master for executive compensation under the Troubled Asset Relief Program, also notes that the government has recovered 75% of the funds it invested in American International Group Inc.
General Motors Co. has reduced its obligations by nearly half, while Ally Financial Inc. (formerly GMAC) has returned nearly a third of its TARP funds. The companies are all still partly owned by the government; four others have since exited the program.
This year, 83% of the compensation given to the 25 top-paid executives at each company will be in the form of stock, which is tied to company performance, the Treasury Department said. Bonuses will be subject to claw-backs. Cash salaries are largely limited to $500,000 or less.
Overall direct compensation, according to the ruling, will be down 10%.
The Congressional Budget Office estimated in December that TARP losses will amount to $34 billion, while the Obama administration projects a $68-billion loss.
At GM, total direct compensation for the top 23 executives will decline $8.8 million, or 12%, from 2011, the Treasury Department said. The highest-paid employee, identified only by a number in the report, will pull in $9 million this year through a cash-and-stock-based salary and long-term restricted stock.
At Ally, overall direct compensation will fall 3.3%, or $2.6 million, while the top-paid employee will earn $9.5 million. At AIG, direct compensation will slip 12.2%, or $14.8 million, with $10.5 million going to the top earner.
By comparison, Morgan Stanley Chief Executive James Gorman made $13 million last year after taking a 15% pay cut. Bank of America’s head, Brian Moynihan, watched his compensation package quadruple to nearly $8.1 million.
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