Watchdog Says Treasury OK'd Excessive Executive Pay At Bailed-Out Firms
The special watchdog overseeing the Troubled Asset Relief Program says the United States Treasury failed to rein in executive pay at companies that received a government bailout.
The AP reports, for example, that the Treasury approved all 18 requests for raises it received from executives at AIG, General Motors and Ally Financial.
The AP adds:
"Treasury also allowed pay packages totaling $5 million or more for nearly a quarter of the executives at those firms, the report says.
"'We ... expect Treasury to look out for taxpayers who funded the bailout of these companies by holding the line on excessive pay,' said Christy Romero, the special inspector general for TARP. 'Treasury cannot look out for taxpayers' interests if it continues to rely to a great extent on the pay proposed by companies that have historically pushed back on pay limits.'"
Bloomberg summarizes the more than 50 page report (pdf) with these numbers: "Sixteen of the 69 top employees at the three companies had 2012 pay packages worth at least $5 million and all but one had total compensation of $1 million or more, the Special Inspector General for the Troubled Asset Relief Program said."
According to USA Today, the Treasury questioned the reporting saying it was "littered with errors and defended its actions, saying it has to maintain a balance between limiting compensation for executives at taxpayer-rescued companies and allowing the companies to 'remain competitive.'"
However, the Treasury said it would consider whether any changes to their policies are appropriate.