Updated with responses from Ally Financial and acting "pay czar" Patricia Geoghegan in paragraphs 8 and 10.
NEW YORK (
) -- The top 25 executives at
have earned roughly $475 in cash and stock from 2009-2011, according to a report released Tuesday by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
The compensation for executives at the two financial companies, both more than 70% owned by the U.S. Treasury following multibillion dollar taxpayer bailouts compares to about $160 million at
, still 32% owned by the government, and about $45 million at
, which the government exited in July.
CEO Robert Benmosche has earned $31 million in compensation leading AIG since August 2009
The numbers are included in a report entitled "The Special Master's Determinations for Executive Compensation of Companies Receiving Exceptional Assistance Under TARP," which looks at efforts by "pay czar" Kenneth Feinberg to control executive compensation at companies extraordinary government support, over and above the $25 billion that went to "healthy" institutions such as
The nearly 80 page report concludes that Feinberg was unsuccessful in reining in pay because officials at both the Treasury and the companies that received the bailout funds warned that being too tough on pay would cause widespread departures of top executives, endangering the companies' ability to repay the funds.
AIG compensation created a public furor in 2009 when it was disclosed that executives in its financial products division, which caused its implosion in 2008, were to receive $165 million in bonuses. That was one of the major events that led to the creation of the "pay czar" in 2009, and the intended capping of cash compensation at $500,000. The report found, however, that there were several exceptions to the rule.
For 10 employees in 2009, and 22 employees in 2010 and 2011, GM, Chrysler Financial, Ally, and AIG convinced OSM to approve cash salaries greater than $500,000. With the exception of
Bank of America
's retiring CEO, the Special Master approved cash salaries in excess of $500,000 for the CEO of each company who asked for a higher salary, and approved millions of dollars in CEO stock compensation," the report found.
An AIG spokesman declined to comment.
Ally spokeswoman Gina Proia wrote via email that the company "is fully compliant with the rules governing executive compensation for the TARP program," and that "a significant amount of compensation is dependent on repayment of the TARP investment and dependent on the company achieving its business objectives."
Feinberg, who stepped down as pay czar in Sept. 2010, referred to a report he published at the time of his resignation, which argued that the pay czar's office "has done its job so far: establishing a determination process; designing pay packages that both respect taxpayers and keep executives on board."
A letter from replacement, acting pay czar Patricia Geoghegan, responding to SIGTARP's report, made similar comments.
Other notable findings of the report by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP):
- Ally officials pushed for high pay, despite knowing that Feinberg was concerned that a majority of the company's Top 25 employees were part of the problem that resulted in the need for a bailout.
- SIGTARP argues Bank of America and Citigroup (C) - Get Report were motivated in part to repay TARP to avoid pay restrictions associated with it.
- The pay czar approved $10.5 million a year AIG CEO Robert Benmosche for three straight years, including $3 million in cash.
- "Ally CEO Michael Carpenter told SIGTARP that the $500,000 annual cash salary limit was constraining: 'We had an individual who was making $1.5 million total compensation with $1 million in cash. Cutting this person's salary to $500,000...this individual is in their early 40s, with two kids in private school, who is now considered cash poor. The reduction in monthly cash expenses would take at least two years to monetize value via stock salary...We were concerned that these people would not meet their monthly expenses due to the reduction incash."
Citigroup and Bank of America spokespeople had no immediate response to the assertion about their motivation for repaying TARP. Each bank received $45 billion in bailout money, which has been fully repaid, on top of the other extraordinary government support such as emergency loans and debt guarantees that was extended to many other large U.S. financial companies.
Written by Dan Freed in New York
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.