Pay czar trims salaries at top of GM exec ranks
PHOENIX (Reuters) - The U.S. pay czar will slash the number of top General Motors Co executives who will receive base salaries of more than $500,000 this year.
Pay czar Kenneth Feinberg said he plans to release the 2010 compensation decisions next week on the five large U.S. companies that are under pay restrictions as part of their government bailouts.
The rules restrict the top 25 executives from receiving more than $500,000 in base cash salary unless a company can prove a good reason for the higher pay.
GM is more than 60 percent-owned by the U.S. Treasury after a government-funded bankruptcy and reorganization in 2009. The U.S. government also holds a small stake in Chrysler, which is under management control of Italy's Fiat SpA
"In General Motors, there will be some people that the company has convinced me should be receiving compensation in excess of $500,000 in base cash salary, there will be some of them," Feinberg told reporters on the sidelines of a Society of American Business Editors and Writers conference.
However, Feinberg also said that the number would be much lower than the 14 GM executives who received base salaries in excess of $500,000 in 2009.
"This year we have cut back," Feinberg said.
There also may be some executives paid in excess of the $500,000 base cash salary at automaker Chrysler, and Chrysler Financial may have some, but no one at GMAC will be allowed an upward departure in base salary, Feinberg said.
Feinberg currently has command over pay for the very top executives and the pay structures for other executives at GM, Chrysler, GMAC, Chrysler Financial and AIG.
In the case of GM, the automaker will remain subject to the restrictions until it completes an initial public offering, Feinberg said.
"My understanding is they are planning at some point an IPO that would result in the issuance of stock and the sale of the stock that would result in the repayment to the taxpayer," Feinberg said.
In mid-February, GM announced that Chairman and Chief Executive Ed Whitacre would receive a $1.7 million cash base salary for 2010, along with $7.3 million in company stock under a plan approved by Feinberg.
(Reporting by David Bailey, editing by Matthew Lewis)