Regulation

U.S. Treasury Denies GM and Ally Execs Were Overpaid

In 2013, the Treasury Department loosened compensation limits for the top 25 executives at GM and Ally Financial. But did it loosen them too much?
Iris DorbianSeptember 24, 2014
U.S. Treasury Denies GM and Ally Execs Were Overpaid

The U.S. Treasury is slamming a report that said it allowed top executives at GM and Ally Financial (formerly GMAC) to receive “excessive pay” at a time when those two companies were getting federal bailout money, reports Reuters.

fast carThe accusation was made by Christy Romero, special inspector general for the U.S. Troubled Asset Relief Program. In a special report she prepared for Treasury, Romero wrote that “Treasury significantly loosened executive pay limits resulting in excessive pay for (the) top 25 executives” at GM and Ally while “taxpayers were suffering billions of dollars of losses” on loan repayments and share sales.

The Treasury denied the charge, saying the report was riddled with inaccuracies and omissions, says Reuters. Further, the department maintained that the compensation of top executives at GM and Ally was restricted while those firms were receiving TARP funding.

Dan Akerson, GM’s CEO from 2010 (he retired in January), was paid $9 million in cash and stock in 2013, a filing reports. His successor Mary Barra was paid $5.3 million in cash and stock in 2013 when she served as executive vice president, says Reuters.

According to terms of its 2009 bailout of GM, the Treasury acquired a “substantial” stake in the company before selling it off completely in December 2013. Following the exit, GM said it put in place “a more appropriate performance-based compensation structure.”

Ally said its executive compensation plan “meets the requirements for TARP companies.” The U.S. Treasury still holds a 13.8% stake in Ally.

Source: Reuters: U.S. Treasury denies allowing ‘excessive’ executive pay at GM, Ally