NEW YORK (YBH.ME) – In an unprecedented move, the White House is setting the maximum pay for executives at seven private sector firms. The seven firms, all of which received billions in TARP funds, are Citibank, AIG, Bank of America, General Motors, Chrysler, GMAC Financial Services and Chrysler Financial.
Obama and former Goldman Sachs CEO and current New Jersey Governor Jon Corzine.
Critics will note that JP Morgan, Wells Fargo and Goldman Sachs are not on the maximum pay list. Goldman Sachs has come under fire for being seen as a “water-carrier” of Obama’s policies by conservatives.
AIG’s Financial Products unit will be hit hardest by the caps with $200,000 being the maximum pay an employee of the division can earn. White House pay czar Kenneth Feinberg wrote the plan and it will slash pay in half, on average, for 175 executives. Some executives will see a 90% salary cut.
Dan Pedrotty, director of the AFL-CIO Office of Investment said “We commend the pay czar and the administration for telling the people who crashed the economy that they need to make the same sacrifices main street and real America have been forced to take on as a result of the economic crisis.” No word from Mr. Pedrotty on how GM and Chrysler contributed to last years crash of the American economy.
It is not known how Citibank and Bank of America will remain competitive with a salary cap for top executives while firms like UBS, Wells Fargo, and Goldman Sachs can and do pay top talent millions of dollars. Goldman Sachs has already set aside $16.7 billion dollars to meet this year payroll.
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John Romano is the publisher and editor of Yes, But However!, a musician, a former political correspondent for BBC Radio London, and a serial web entrepreneur. Follow him on twitter: twitter.com/yesbuthowever or John Romano on Google+John Romano article archive.
