Don't miss

Replay


LATEST SHOWS

EYE ON AFRICA

Kenya’s opposition files a petition against presidential vote

Read more

MEDIAWATCH

'Siempre vida Barcelona'

Read more

THE DEBATE

Spain attacks - Can Europe prepare for vehicle-ramming terror attacks?

Read more

EYE ON AFRICA

Measures in place to prevent Grace Mugabe leaving South Africa

Read more

IN THE PAPERS

Terror in Barcelona

Read more

BUSINESS DAILY

Terror attack, Trump turmoil rattle stock markets

Read more

FRENCH CONNECTIONS

Malbouffe: understanding junk food à la française

Read more

IN THE PAPERS

Lebanon repeals 'rape law', but activists say more is needed to protect women

Read more

BUSINESS DAILY

US business leaders abandon Trump after Charlottesville

Read more

Americas

Top titans face steep salary cuts at rescued firms

Text by FRANCE 24 (with wires)

Latest update : 2009-10-23

US firms who received large amounts of government aid during the height of the financial crisis have been asked to make steep cuts in salaries of top executives.

US President Barack Obama’s administration has ordered drastic salary cuts in US firms who recieved tens of billions of dollars in emergency government loans during the height of the financial crisis.

‘Salary Czar’ Kenneth Feinberg of the US Treasury was appointed by Obama to handle the pay and compensation issue as part of the $700 billion government bailout Trouble Asset Relief Programme (TARP).

AIG, Bank of America, Citigroup, General Motors Co., GMAC Inc., Chrysler Group LLC and Chrysler Financial, must slash cash payments of their 25 corporate titans by up to 90 percent and slice total compensation by almost 50 percent.

Feinberg also took a shot at curbing extravagant individual corporate perks including country club membership, private planes and "golden handshake" payouts.

The treasury plan also proposes to turn existing cash guarantees held by executives into long-term stocks.

In a seperate move, the Federal Reserve unveiled new rules to curb pay awards at top banks that encourage excessive risk-taking which imperils the wider financial system.

Welcoming Weinberg's measures, President Barack Obama said it was "an important step forward" in curbing financial excess.
  
“This is really a reaction to the outrage that we have seen over the second round of bonuses, some of them record level,” said Nathan King, FRANCE 24 correspondent in New York.

Insurance giant American Insurance Group (AIG)  came under fire for paying salaries and retention bonuses worth $165 million to employees after taxpayers pledged up to $180 million to keep it afloat.

However, the impact of the salary cuts brings no lasting repercussions to the Wall Street as the plan is limited to only a few individuals.

“It is not a change of culture… It is a slap on the wrist for the companies that haven’t turned around quickly and haven’t paid back the cash,” said King.

Date created : 2009-10-23

COMMENT(S)