Controversy over pay czar’s restrictions
TEXT OF INTERVIEW
Bill Radke: What kind of bonuses did Fannie Mae and Freddie Mac’s top executives get this year? The government’s going to tell us today, and sources are saying it’s between $4-6 million. Fannie and Freddie, of course, got bailed out by taxpayers. Still, their executive pay is not subject to the pay czar, Kenneth Feinberg. That’s because they didn’t receive TARP money — they were seized by the government.
General Motors, on the other hand, did get TARP money and does fall under the pay czar. And yesterday, Feinberg announced GM’s 2010 pay packages. Marketplace’s Mitchell Hartman is with us live. Good morning, Mitchell.
Mitchell Hartman: Hi, Bill.
Radke: So what will the top GM execs make next year?
Hartman: Well, for GM’s new chief financial officer, Chris Liddell — who came from Microsoft — his base salary will be $750,000. Plus about $5.5 million in stock. Michael Carpenter, the new CEO of GMAC — that’s the auto lender — he’ll do a a bit better — $950,000 in salary and roughly $8.5 million in stock grants. Feinberg has pointed out in defending these pay packages — which by the way, are higher than government-imposed limits — that most of the pay is in long-term stock grants unless the company does well over the years and pays back billion in loans from the Troubled Asset Relief Program.
Radke: I mentioned controversy at the top. What kind of debate are these pay restrictions causing?
Hartman: Well there’s criticism on both sides. Critics look at these numbers — in the multi-millions — and say they’re too high. A lot of executive compensation experts, themselves, and executives are really bridling at being under the thumb of a government pay czar. The new CEO of AIG has been railing against the government telling him how to run his business and threatening to quit. Citigroup and Bank of America are paying their TARP loans back, so they’ll be free of oversight next year.
Radke: Marketplace’s Mitchell Hartman joining us. Thanks, Mitchell.
Hartman: You’re welcome.
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