Bailed-out firms got big raises
WASHINGTON — The Treasury Department ignored its guidelines on executive pay at firms that received taxpayer bailouts and last year approved compensation packages of more than $3 million for the senior ranks at General Motors, Ally Financial and American International Group, according to a watchdog report released on Monday.
The report from the special inspector general for the Troubled Asset Relief Program said the government's pay czar signed off on $6.2 million in raises for 18 employees at the three companies. The chief executive of a division of AIG received a $1 million raise, while an executive at GM's troubled European unit was give a $100,000 raise. In one instance, an employee of AIG's Residential Capital was awarded a $200,000 pay increase weeks before the subsidiary filed for bankruptcy.
“We expect Treasury to look out for taxpayers who funded the bailout of these companies by holding the line on excessive pay,” said Christy Romero, special inspector general for TARP. “Treasury cannot look out for taxpayers' interests if it continues to rely to a great extent on the pay proposed by companies that have historically pushed back on pay limits.”
The inspector general's report accuses Patricia Geoghegan, Treasury's acting special master for compensation, of side-stepping protocol that let pay packages at the midpoint of comparable firms. Geoghegan, however, said the audit is riddled with inaccuracies and mischaracterizes the data provided to the inspector general.
Compensation at bailed-out firms became a lightning rod during the financial crisis. A public outcry erupted in 2009 when AIG paid $168 million in retention bonuses to employees at Financial Products, the unit whose complex deals had crippled the insurance giant. The nation's biggest banks, including Morgan Stanley and JPMorgan Chase, came under fire for doling out six-figure salaries and bonuses from taxpayer funds.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- 1 Marine killed, 9 hurt in helicopter hard landing
- U.S. Catholics at odds with church, survey finds
- World population of trees to people: 422 to 1, team finds
- Army fully opens Ranger School to female soldiers
- Judge clears way for revival of NSA wiretap suit
- 34th senator signs on to Iran nuclear deal, crumbling GOP’s hopes to override veto
- Sasquatch sighting! Maine police say Bigfoot artist nabbed
- Financial exec gets 8 years for fraud
- Clinton: Women ‘expect’ extremism from terrorists, not GOP candidates
- West Point law professor resigns amid remarks that critics of war on terror are ‘treasonous’
- Clerk aims to block Ky. governor’s order