Republicans boiled over at the congressional hearing held yesterday, regarding the pay for top executives at taxpayer-assisted companies.
The debate started with a inspector general’s report in which he criticized compensation received by top executives and GM, Ally Financial and insurance giant AIG. This lead to the House Oversight and Government Reform subcommittee hearing, which took place one day after GM denied report that it asked a $2-million pay increase for its CEO Dan Akerson.
On Monday, the Free Press published documents according to which GM proposed increased 2013 compensation for its executives, among which $11.1 million for Akerson. Although the automaker denied the report, its released document showed the same $11.1 million for Akerson, but the company said this in fact is Akerson’s 2012 compensation, which was higher than the $9 million previously approved.
Republicans highly criticized Patricia Geoghegan, the independent special master at the Treasury Department, the one who gave the OK for the compensation for the top 25 executives at GM, Ally and AIG. House Oversight Chairman Darrell Issa, a California Republican, said that GM exists due to the 2009 bailout and that the automaker still owes the government about $20 billion.
Although the Obama administration restricted payments to $500,000, last year 23 executives at the above mentioned companies received cash salaries which surpassed this number. Christy Romero, the inspector general for TARP, said that these pay packages not only encourage companies to ask for future bailouts, but also discourage companies that have received aid to exit TARP.
“What I don’t understand is how we can do this — reward people for failure,” said U.S. Rep. Kerry Bentivolio.
Romero’s office said that in 2012 GM’s top 23 executives received compensation of $64 million, AIG’s executives got $74 million and Ally Financial’s top 25 received $108 million.