US limits executives pay to $500,000 at 4 bailed-out cos

WASHINGTON: Continuing with its strict compensation regulations for the bailed-out entities -- Citi, AIG, General Motors and GMAC, the US government has extended the pay cap for their executives, limiting the annual cash salaries to USD 500,000.

The US pay czar has imposed new restrictions on compensation for the 26th to 100th highest paid employees at the bailed-out firms. In October, the government had slashed the pay by 50 per cent for the top 25 executives at these four companies.

Exorbitant pay packages on the Wall Street attracted widespread criticism in the wake of the financial turmoil, with many blaming such practices for excessive risk taking.



Kenneth R Feinberg, the Special Master appointed by President Barack Obama to look into pay structure at bailed out firms, has asserted that cash should account only for 45 per cent of the total compensation.

Popularly known as the pay czar, Feinberg has noted the decision should be implemented immediately at Citi, AIG, GM and GMAC, which have received billions of dollars from the Troubled Asset Relief Programme (TARP).

"(Annual) Cash salaries generally limited to USD 500,000 ... Overall, cash is limited in most cases to 45 per cent of total (compensation); all other pay must be in company stock," the pay czar said in a statement on Friday.