Up until the mid-1800s, debtor’s prison did await those who could not pay their debts. To this day, more than a third of U.S. states allow debtors to be jailed for non-payment. If you run a company called GM, Ally, or AIG, not only do you keep your freedom, you will be bailed out by the government, and given a $10 million salary. Waitaminute, you say, aren’t executive salaries of bailed-out companies limited to a still very generous $500,000? This is exactly the question the special inspector general for the Troubled Assets Relief Program asked. The answer, provided in a report to Treasury Tim Geithner, and the public, is scathing: The Treasury Department ignored its own rules and approved “excessive pay packages” for the leaders of bailed-out companies.
The report lambasts the government which “continues to award excessive pay packages.” It also flogs executives who “continue to lack an appreciation for their extraordinary situations and fail to view themselves through the lenses of companies substantially owned by the U.S. Government.” Special mention for an inordinate amount of chutzpah received “GM CEO Dan Akerson [who] even asked Treasury Secretary Geithner to relieve GM from OSM’s pay restrictions, which was denied.” Akerson took home $9 million in cash and stock in 2012, apparently, he thought that was not enough.
A total of 69 executives of bailed-out companies are under supposed salary restrictions. 23 were found earning more than the $500,000 limit. Another 25 made exactly $500,000. 65 of 69 made more than $450,000. Says the report:
“In stark contrast, the 2011 median household income of U.S. taxpayers who fund these companies was approximately $50,000.”
The report did not specifically reveal by name how much the executives of bailed-out companies make. It also did very little to hide the names.
According to GM’s website, a Daniel F. Akerson serves as GM Chairman and Chief Executive Officer, a Stephen J. Girsky is GM Vice Chairman, Daniel Ammann is GM Senior Vice President & Chief Financial Officer.
The Washington Post calls the report “stinging allegations of lax oversight and supervision.” The Detroit Free Press on the other hand complains that “Akerson’s pay package, which included $1.7 million in cash salary and stock valued at $7.3 million, did not increase from 2011 to 2012,” and that Alan Mulally and Sergio Marchionne make much more.