WASHINGTON — Responding to the furor over executive pay at companies bailed out with taxpayer money, the Obama administration will order the firms that received the most aid to slash compensation to their highest-paid employees, an official involved in the decision said on Wednesday.
The plan, for the 25 top earners at seven companies that received exceptional help, will on average cut total compensation by about 50 percent. The companies are Citigroup, Bank of America, American International Group, General Motors, Chrysler and the financing arms of the two automakers.
Some executives, like the top traders at A.I.G., will face tight limits on their pay. In addition, the top-paid employees at all the affected companies will face new limits on their perks.
The plan will also change the form of the pay to align the personal interests of the executives with the longer-term financial health of the companies. For instance, the cash portion of the executives’ salaries will be slashed on average by 90 percent, and the rest will be replaced by stock that cannot be sold for years.
But while the plan would pare compensation substantially from what the highest-paid people at the companies might have received under normal circumstances, it would still permit multimillion-dollar pay packages. And it would have no direct impact on firms that did not receive government bailouts or that have already repaid loans they received from Washington, leaving it unclear how much effect, if any, it will have on the broader issues relating to executive compensation, income inequality and the populist animosity toward Wall Street and corporate America.
The plan, which was written by Kenneth R. Feinberg, the official at the Treasury Department in charge of setting compensation for bailed-out companies, will be made public in a few days. The official who described the plan’s basic components did not disclose the particular impact on specific employees of the firms.
Republicans have a different idea. According to Rachel Maddow, three Republican congressman have offered an ammendment to eliminate all government agencies that regulate banking.
I kid you not. Republicans want to let the banking industry — which plunged the United States economy into the Great Bush Recession, which almost became the Bush Depression — Republicans want to completely deregulate the banking industry so they can do whatever they want. Republicans want to reward the banking industry, which paid out obscene bonuses to executives after accepting bailout money.
Republicans want to reward greed.
Stop back later for details.