White House to Cut Executive Pay at Bailed-Out Firms

Two weeks ago David Sessions reported on the Obama administration's plan to limit salaries for corporate banking executives whose firms accepted bailout funds. Details of the plan emerged Wednesday.

As many as 25 executives at seven corporations that received the largest chunks of federal money will see their compensation cut by about half on average, according to the Washington Post. Cash salaries will be cut by about 90 percent compared to last year.

The administration's "pay czar," Kenneth R. Feinberg, will also slash some executive perks, including the use of corporate jets, chauffeurs, and country club fee reimbursement.

From the Post:

The seven companies under Feinberg's purview are Citigroup, Bank of America, General Motors, Chrysler, GMAC, Chrysler Financial and American International Group. These firms have received a total of about $250 billion in bailout funds from the Troubled Assets Relief Program, adopted last year by Congress, and benefited from hundreds of billions of dollars more in government guarantees and other support.

Feinberg's appointment last June was prompted by public outrage over huge bonuses paid to executives at failing companies supported by taxpayer money. He has been meeting with corporate officials to negotiate the new pay deals. His decisions are binding.