Obama tells 'bailed out' firms to cut pay

Thu Oct 22 2009 13:19:06

The Obama administration is set to slash the pay of top earners at banks and carmakers bailed out by the US government.

The plan calls for halving overall compensation, and cutting cash salary payouts by an average of 90 percent to try and address public outrage over the excessive amounts.

The sweeping cuts, being negotiated by US pay czar Kenneth Feinberg, would mark a bold move for an administration that has railed against excessively high pay on Wall Street.

Blockbuster earnings and bonuses at Goldman Sachs and other companies that received taxpayer assistance have stoked public anger over compensation as the US grapples with almost 10 per cent unemployment and little help for homeowners struggling to pay mortgages.

The Wall Street Journal has reported that Feinberg is also planning to demand broader corporate governance changes, including splitting the roles of chairman and chief executive officer.

The seven companies affected are: AIG, Bank of America, Citigroup, General Motors, Chrysler, GMAC and Chrysler Financial.

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