GM and Chrysler executives will see a 25% cut in pay next year. Find out who is losing 85% of their salary inside.
As part of a bold move to cut upper management pay at firms that received bailout funding, the U.S. government announced that they will slash executive salaries by 25% at General Motors and Chrysler. Deeper cuts were put in place at the automakers' financial businesses as well.
Compensation at Chrysler Financial was cut by 56%, while GMAC executives found 85% cut from their weekly paychecks.
Chrysler CEO Sergio Marchionne was not affected. The head of Fiat took no money from Chrysler for 2009. Any executive staying onboard at Chrysler will make no more than $500,000 cash, with bonuses and stock options also severely limited.
Despite the pay cuts, GM CEO Fritz Henderson may receive an increase in pay. Henderson stands to earn cash and stock compensation up to $5.5 million, much higher than his 2008 salary, but $2 million less than his 2007 deal.
Although critics condemn the decison by the government as being interfering, the slash was part of the agreement the firms made when they took funding from the Troubled Asset Relief Program in 2008. TARP funds were used by GM and Chrysler as operating capital, helping to stave off bankruptcy.