Executives at General Motors Co. and Ally Financial Inc. have been denied a cash salary pay raise, thanks to the Treasury Department. The Treasury also said CEO pay will remain frozen, and compensation for the top 25 executives has declined at both firms.
GM proposed a cash salary pay increase for 12 top executives, and although Ally didn’t ask for any raise, executives from neither firm will be getting a raise. Cash collected by GM’s executives is set to fall 31 percent in 2013, and the lower overall pay has been attributed to new executives who saw the compensation fall 57 percent compared to earnings in 2012.
The Treasury Department’s decision to decline GM’s request came after a congressional hearing in February that criticized executive pay at both Ally Financial and GM. Greg Martin, GM spokesman defended the company by saying, “In one of the most highly competitive industries, it’s important that GM have the tools to retain and attract the top talent needed to keep the company’s current momentum going and to create greater shareholder value.”
For 2013, cash salaries for the top 25 executives at both firms are 4 percent below the median for cash salaries and 56 percent below the median for total cash compensation for positions at similar companies. The Treasury approved pay for seven companies that got large bailouts during the recession, and five are no longer subject to the limits. However, GM still is, and will exit when the Treasury sells its remaining shares of the company.
Source: Detroit News