The Treasury Department today is expected to order seven companies that have not paid back last year's US government bailouts to halve their top executives' average compensation. The cuts apply to the 25 highest-paid executives at banks and other companies that received the most assistance, with salaries being slashed by as much as 90%. The move, reported last night, is "real," TARP overseer Elizabeth Warren confirmed to CBS this morning.
The seven companies are Bank of America, AIG, Citigroup, General Motors, GMAC, Chrysler, and Chrysler Financial. Pay cuts aside, companies have been reworking their pay plans to ensure compensation reflects executive performance, partly by giving executives more of their compensation in stock and stock options. The pay restrictions will also require any executive seeking more than $25,000 in perks to get permission from the government.