WASHINGTON/NEW YORK, (Reuters) – Top earners at financial and auto companies bailed out by the U.S. government will see their pay slashed under an Obama administration plan aimed at addressing public outrage over eye-popping paychecks, two sources familiar with the matter said yesterday.
The plan calls for halving overall compensation, and cutting cash salary payouts by an average of 90 percent, said the sources, who requested anonymity because they were not authorized to speak publicly about the matter.
The sweeping cuts, being negotiated by U.S. pay czar Kenneth Feinberg, would mark a bold move for an administration that has railed against excessively high pay on Wall Street.
White House economic adviser Lawrence Summers told the Reuters Washington Summit yesterday that he believed Feinberg’s review would “produce an outcome where they will be very substantially reduced.”
White House spokesman Bill Burton, traveling with President Barack Obama in New Jersey, told reporters, “The president put Ken Feinberg in place in order to be an advocate for taxpayers and it appears that Mr. Feinberg is doing what the president put him in place to do.” Otherwise, Burton said, he would not comment ahead of the report, due Oct. 30. The companies affected are: AIG, Bank of America, Citigroup, General Motors, Chrysler, GMAC and Chrysler Financial. They all declined to comment.
A Treasury Department spokesman also declined to comment.
Blockbuster earnings and bonuses at Goldman Sachs Group Inc and other companies that received taxpayer assistance have stoked public anger over compensation as the United States grapples with a 9.8 percent unemployment level and little assistance for homeowners struggling to pay mortgages.
