U.S. to cut pay for bailed-out bosses

AVERAGE SLASH AROUND 50% — 175 executives at 7 companies affected

By Tomoeh Murakami Tse and Brady Dennis
WashPost
Thursday, October 22, 2009

NEW YORK -- The Obama administration plans to order companies that have received exceptionally large amounts of bailout money from the government to slash compensation for their highest-paid executives by about half on average, according to people familiar with the long-awaited decision.

The cuts will affect 25 of the most highly paid executives at each of five major financial companies and two automakers, according to the sources, who spoke on the condition of anonymity because the plan has not been made public. Cash salaries will be cut by about 90 percent compared with last year, they said.

The administration will also curtail many corporate perks, including the use of corporate jets for personal travel, chauffeured drivers and country club fee reimbursement, people familiar with the matter have said. Individual perks worth more than $25,000 have received particular scrutiny.

In making the ruling, the administration's "pay czar," Kenneth R. Feinberg, will be inserting the government as never before into pay decisions traditionally made in corporate boardrooms. His decree, which the Treasury Department expects to be announced Thursday, will culminate a months-long review prompted by public outrage over outsize paydays at failing companies saved with taxpayer money.

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