Pay czar caps Citibank, AIG, GM staff remuneration
12 Dec 2009
Kenneth Feinberg, the treasury department's special master for compensation, has imposed a $500,000-per-person cap on overall compensation for mid-level executives at four of the biggest recipients of taxpayers' money.
These are the carmaker General Motors Co. and its finance arm GMAC Inc., insurer American International Group Inc. and banking giant Citigroup Inc.
Feinberg mandated that at least half of the affected employees' annual pay must be deferred for at least three years. And no more than 45 per cent of the pay can be in cash.
Feinberg also decreed that any bonuses for the executives must be based on "real performance measures."
At least 50 per cent of bonuses must be paid in stock that can't be sold for a period of they are based on "prove illusory."
"Today's decisions fundamentally restructure pay to emphasize the long term," the treasury department said in a statement, adding that "the rules put an end to the practice of paying routine 'bonuses' regardless of performance."
