Treasury: Bailed-out firms to slash pay in November - Spokane, North Idaho News & Weather KHQ.com

Treasury: Bailed-out firms to slash pay in November

WASHINGTON. - The Treasury Department is ordering companies that received billions of dollars in government bailouts to halve total compensation for their top executives, but the big reductions will not apply to pay earned before November.

Kenneth Feinberg, the Treasury official leading the pay review, says average salaries for the top 25 executives are being cut 90 percent starting in November.

Feinberg says the government did not want to make executives return compensation already received this year, but the reduced pay levels will be the base for making decisions on salary in 2010.

The executives will still be subject to compensation limits as long as their companies are receiving support from the government's $700 billion bailout fund.

Previous Coverage
Administration plans big pay cuts at bailout firms

The Obama administration plans to order companies that received huge government bailouts last year to sharply cut the compensation of their highest paid executives.

A person familiar with the decision, who spoke on condition of anonymity because it has not been announced, says the seven companies that received the most assistance will have to cut the annual salaries of their 25 highest-paid executives by an average of about 90 percent from last year.

This person says the Treasury Department will announce the deep pay cuts within the next few days.

The seven companies are:

  • Bank of America Corp.
  • American International Group Inc.
  • Citigroup Inc.
  • General Motors
  • GMAC
  • Chrysler
  • Chrysler Financial

Obama to refocus bailout on small businesses

President Barack Obama says the government's $700 billion financial bailout is shifting away from Wall Street giants and toward small businesses on Main Street.

Obama said on Wednesday that he wants to help small businesses grow and is asking Congress to increase the loan amount they can receive from the Small Business Administration.

Obama also says if smaller banks describe how they would increase lending to small businesses, Washington will give those banks capital so they can loan more money. He says he wants to focus on hard-hit rural and underserved areas.

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