The US Treasury has been harshly criticized by a government auditor for approving ‘excessive’ pay raises for CEOs at three companies which already received large bailouts.
Christy Romero, the inspector who oversees the $700 billion Troubled Asset Relief Program, harshly criticized the US Treasury for approving pay raises at Ally Financial, GM and American International Group. According to the report released yesterday, January 28th, the Treasury approved cash salaries of $450,000 and even more for 94% of the top-tier executives at GM, Ally and AIG (65 executives in total).
“While taxpayers struggle to overcome the recent financial crisis and look to the U.S. government to put a lid on compensation for executives of firms whose missteps nearly crippled the U.S. financial system, the U.S. Department of the Treasury continues to allow excessive executive pay,” the report said.
AIG is no longer subject to the pay restrictions as it repaid the government bailout last month. Patricia Geoghegan, the Treasury’s “pay czar,” removed long-term restricted stock for senior executives replacing it with stock salary. Overall she approved pay packages of more than $5 million for 16 top employees at GM, Ally and AIG.
GM spokesman Dave Roman said that the car maker continues to increase while complying with all TARP restrictions and Ally spokeswoman Gina Proia said the company ‘s pay is also complying with Treasury rules.