Chrysler Execs Try to End-Run Federal Salary Cap
According to ABC News, on the same day that Chrysler filed documents with federal bankruptcy judge Arthur Gonzalez to terminate 789 dealers, the bankrupt automaker is scheming to reclassify its top suits as Fiat employees. The change would allow the execs to avoid the bailout-related federal salary limit. “In documents filed in bankruptcy court, the company said senior Chrysler ‘officers’— the company’s top executives—can be considered Fiat employees ‘seconded’ to Chrysler, and therefore be paid by Fiat beyond the $500,000 cap set by the government.” The smoking gun: “Any such seconded officer may receive supplemental employment compensation from Fiat . . . notwithstanding any ‘cap’ on compensation payable to such officer . . . under any Law, rule or policy applicable to the Company.” The MSM is bound to take this story and run with it. Which isn’t going to help ChryCo on the forecourt or in court after dealers file the inevitable class action suit against, uh, someone.
More by Robert Farago
Comments
Join the conversation
"Quote windswords: ” While it’s true these companies and execs you mentioned take federal money they are run as successful businesses, so I don’t think it’s a good comparison.” "So…you’re okay with the CEO of Lockheed-Martin making a total compensation package of $26 Million Federal dollars?" Yes, as long as the stockholders (that would be you and me potentially) are happy with the companies performance I don't see a problem. The government doesn't have a problem either because they feel that Lockheed is delivering a good product or service at a reasonable cost. Adamatari: "It’s amazing the snow job some so-called conservatives have perpetrated, actually convincing middle class and poor people to hate those on the bottom (even themselves) while the elites rake in absurd amounts." Hogwash. The welfare system was out of whack and the "man on the street" or as Marx would have said "the Proletariat" knew it. The liberal politicians howled how this reform would be the end of civilization as we knew it, dogs and cats living together, etc. And then it passed. And - no starving kids, no riots in the streets, nothing. I guess "those on the bottom (even themselves)" got a job. Hate is not the right word. People don't like those who abuse the system, whether it's the person getting welfare undeservedly or medical disability (even after he's filmed playing tennis), the CEO skirting a restriction on his salary while his company loses money, or a politician getting away with sweetheart real estate deals (I'm looking at you Harry Reid).
Also, think we have a definition problem here. Lockheed et al are Companies that sell products to the US Government. The accept federal money as payment for services rendered. If the BoD of said companies want to pay their CEOs gobs, it is their right and we have no say unless we are stockholders. Then we vote our concience. In the case of Chrysler (and soon GM), there is a salary cap to protect the American Taxpayer. They are recieving federal money not for services rendered but for charity. They ran their companies into the ground and are expecting the government to step in to save them. As such, they become something like government employees and should be paid as such. I would like to see the GS pay system applied to Chrysler white colars until Chrysler can be removed from the government tit!
@windswords and Kurt: Many U.S. executives are overpaid, many obscenely so and in a perfect world, I'd like to see U.S. executives have more honor and not take more than 10X the average worker's pay much like their Japanese counterparts frequently do. However I would never want to see it legislated because once you let politicians determine someone's pay, they will feel emboldened to determine everyone's pay and I feel that is counter to the ideals of free enterprise, capitalism and liberty.