Bailed-out US firms told 'cut bosses pay'
Updated on 22 October 2009
American firms bailed out with billions of dollars of taxpayers' money are being told to cut the pay of their top executives. Sarah Smith reports.
The firms that received the most money from the US Treasury will have to reduce the basic salaries of their 25 best paid employees by up to 90 per cent.
On Wall Street this Christmas they say they are planning to party likes its 2007, rewarding themselves like the financial crisis never happened and handing out huge bonuses as though they were not a fundamental part of the problem.
They might want to pay themselves before they pay back the taxpayer, but the compensation for the top 25 executives in any firm can be halved with less ready cash and more long term stock, and they'll need special permission to use perks like private planes.
The people whose pay the government can limit add up to only 175 people. So the White house want to give shareholders powers to vote on pay of top executives, hoping they can do what politicians cannot to limit the largest pay packets.
The stock market may be up but the rest of America is still feeling the pain they cannot bear to watch bailed out bankers getting rich again.
Goldman Sachs paid back $10bn so they would not be bound by these new rules, and they are planning to pay over $16bn in bonuses this year.
