FACTBOX: Details of pay czar rulings on bailout firms

WASHINGTON (Reuters) - The Treasury's pay czar has slashed 2009 pay rates by more than half for top executives at seven banks and automakers that received massive taxpayer bailouts and set new guidelines on payment of bonus awards.

Following are key points of the rulings by Kenneth Feinberg, the special master for executive compensation in the Treasury's $700 billion Troubled Asset Relief Program.

The rulings apply to the top five executives and 20 other most highly paid employees at American International Group, Bank of America, Citigroup, Chrysler Group LLC, Chrysler Financial, General Motors Co., and GMAC LLC.

SALARY, CASH COMPENSATION

-- Average cash compensation rates will fall more than 90 percent for the final two months of 2009, compared to the annualized rate for 2008. Base cash salaries are limited to $500,000 for more than 90 percent of employees affected by the ruling. No salary already paid this year will be "clawed back".

-- Salary amounts above $500,000 must be paid in company stock that must be held for the long term. These shares may be sold only in one-third installments that will not begin until 2011, unless taxpayer funds are repaid earlier.

-- Cash bonuses based on short-term performance are banned in favor of company stock that must be held for long periods. "Guaranteed" cash payments will be restructured into long-term stock awards to align incentives with company performance.

-- Including long-term stock awards, total compensation rates for the final two months of 2009 will fall by about 50 percent from annualized 2008 rates.

-- Exceptions were made to the cash compensation rule in cases where Feinberg deemed increases necessary to retain "key talent critical to a company's long term success." For example, AIG's chairman, Robert Benmosche, will receive a $3 million cash salary.

INCENTIVE COMPENSATION

-- Incentive pay or bonuses must be paid in long-term restricted company stock.

-- Restricted stock awards cannot be cashed in unless the company first repays its TARP obligations.

-- Employees can receive incentive stock awards only if they attain predetermined performance goals set in consultation with Feinberg. Achievement of the goals must be certified by each company's compensation committee, which under Treasury regulations must solely consist of fully independent directors.

-- Incentive awards can be paid only if the employee provides at least three years of service to the company after the award is made.

OTHER PAY PRACTICES

-- Feinberg's rulings generally cap personal expenses for executives at $25,000 per year, with limited exceptions for unusual circumstances that can be justified to the Treasury.

-- Large "golden parachute" severance payments to the companies' senior executives and five highest paid employees were banned by earlier TARP restrictions. Feinberg's rulings prohibit the seven firms from increasing the amount of any "golden parachute" payable to any of their 20 highest earners in the final two months of 2009.

-- Feinberg's rulings prohibit additional accruals under supplemental executive pension programs and company contributions to other non-qualified deferred compensation plans.

TIMING OF NEW RULES, RATES

-- New salary rules and lower pay rates apply to the final two months of 2009.

-- Bonuses for 2009 must be paid in accordance with new rules for restricted stock awards.

-- Feinberg rulings are expected to set a template for executive pay proposals to be submitted by the seven firms in 2010 if they are still holding taxpayer funds.

(Reporting by David Lawder, Editing by Chizu Nomiyama)