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Pay czar to announce Detroit salary caps this week

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Pay czar to announce Detroit salary caps this week

03/22/2010, 9:02 AMBY ANDREW GANZ

United States Pay Czar Kenneth Feinberg confirmed his intentions to announce a cap on the number of General Motors and Chrysler executives making a base pay of over $500,000 this year. The announcements, made in order to comply with pay restrictions that come with “extraordinary” government bailouts, will be made later this week.

Until the automakers pay back the government loans, they must comply with federal rules that restrict only top 25 executives from receiving more than $500,000 in base salary – unless the automaker can justify the higher salaries. Currently, Feinberg has final say on executive compensation at GM, Chrysler, GMAC and Chrysler Financial, as well as AIG Inc.

“In General Motors, there will be some people that the company has convinced me should be receiving compensation in excess of $500,000 in base cash salary, there will be some of them,” Feinberg told reporters at a conference in Phoenix.

Feinberg said that no executive at GMAC will receive more than $500,000, although GM, and Chrysler will likely have a handful of highly-paid executives. GMAC’s CEO is expected to receive a $9 million stock package.

Chrysler Financial will see some pay cuts as the firm wraps up what is likely its last full year in business. Chrysler Financial’s doors are expected to close at the end of 2011. The firm’s top executives will both make about $1 million and two others will receive more than $500 million.

Last year, GM had 14 executives who received more than $500,000 in base salary, but that number will likely drop to just one executive aside from GM chief Ed Whitacre Jr.

Earlier this year, Feinberg approved GM CEO Whitacre’s $1.7 million base salary plus $7.3 million in GM stock – about twice what former CEO Fritz Henderson was making.



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