Pay Czar Slashes Top Salaries at 7 Bailed-Out Firms

175 top earners will see pay cuts averaging 50%
By Nick McMaster,  Newser Staff
Posted Oct 21, 2009 3:53 PM CDT
FILE - In this Sept. 16, 2008 file photo, The American International Group logo is shown in New York.   (AP Photo/Mark Lennihan, File)
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(Newser) – President Obama’s pay czar will cut compensation for the 25 highest-paid employees at seven companies that took large amounts of government aid. The 175 executives will face salary reductions of 90%, but with other compensation elements added in, the total reductions average 50%. Ken Feinberg also will require the seven bailed-out firms to change the way they do business in an effort to discourage excessive short-term risk-taking.

The financial-products division at AIG will suffer some of the toughest restrictions, the Wall Street Journal reports—no employee of the unit will make more than $200,000. In addition to AIG, the other firms affected are Bank of America, Citigroup, GM, GMAC, Chrysler, and Chrysler Financial.