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April 09, 2012 at 09:01 AM
The Treasury announced on April 6, 2012 that the chief executives of AIG, Ally Financial and General Motors would have their compensation packages frozen for a second year in a row, essentially keeping their compensation at 2011 levels.
The compensation freeze arose out of the 2007-2009 financial crisis when the government injected taxpayer-financed funds into the companies as part of the Troubled Asset Relief Program (TARP).
AIG received $68 billion, General Motors $50 billion and Ally Financial $17 billion to keep them from utter destruction.
The three companies were part of a larger group of seven companies that were deemed by the Treasury to have received “exceptional” assistance; in response to populist anger at high-pay and huge bonuses at bailed-out firms, the Obama administration created a “special master’s office” to oversee pay practices at exceptional firms. Four of the original seven, Bank of America, Citigroup, Chrysler Financial and Chrysler have repaid their TARP money and left the program.
