Target: Acting Treasury Secretary Neal Wolin
Goal: Reign in excessive executive pay for companies bailed out in 2008
Executives at AIG, General Motors, and Ally Financial – three companies bailed out by the United States government in 2008 – have been flagged for receiving excessive pay in a recent report. A stipulation of the 2008 bailout was that executive pay was to be kept in check. Despite this, the Treasury Department signed off on numerous high-figure compensations for the executives of these companies. Highlighting the list of offenders were the three companies’ CEOs: AIG CEO Robert Benmosche was awarded $10.5 million, Ally CEO Michael Carpenter received $9.5 million, and GM CEO Daniel Akerson got $9 million. The Treasury Department must recognize disproportionate compensation and reign it in.
This report comes from the office of Christy Romero, the Special Inspector General for the Trouble Asset Relief Program (SIGTARP), a watchdog position established by the 2008 law authorizing the bailouts. Ms. Romero is tasked with overseeing compensation for top executives at firms that received government support. When talking about the new findings, the office released a statement saying, “”[W]hile historically the Government has not been involved in pay decisions at private companies, one lesson of this financial crisis is that regulators should take an active role in monitoring and regulating factors that could contribute to another financial crisis, including executive compensation that encourages excessive risk taking.”
One of the goals of these watchdogs is to make sure the companies are aligning executive incentives with the long-term health of their companies, especially through limiting cash awards in favor of restricted stock. In their recent report, however, Romero said that the Treasury Department has often allowed plans by the companies with large compensation packages and sizable cash portions for their executives. In 2012 alone the Treasury Department authorized plans for over $1 million for all but one of the three companies’ 69 executives, 54% of whom received packages of $3 million or more. And what’s worse is none of the three CEOs listed above received any long-term restricted stock as part of their compensation.
Taxpayer dollars are the only reason those companies still exist, and it is extremely unfair to the American people to still allow these executives these fat paychecks when their excessive pay is part of what got the U.S. into their financial mess in the first place.
By signing this petition, you are urging the Treasury Department to stop signing off on these ridiculous pay packages. Help hold these companies accountable to the people to whom they owe their livelihoods.
Dear Acting Treasury Secretary Neal Wolin,
The state of executive pay for AIG, General Motors, and Ally Financial is unacceptable. Their CEOs all received upwards of $9 million in compensation in 2012, and none of the packages tie their compensation to the success of the companies through long-term stock options. All but one of the 69 executives received over $1 million, and all of these compensation packages were made possible by your Treasury Department signing off on the deals.
Put simply, this is a slap in the face of the American public, whose taxpayer dollars made the continued existence of these three companies possible. Although it is not normally the government’s place to regulate executive pay, the generous bailout these companies received was predicated on the government taking measures to ensure the situation that caused the bailout never happens again.
I am urging you, as Treasury Secretary, to reign in this excessive executive pay. Please take measures to ensure that the success of the executives are tied to the success of the companies, an important step to making sure that a bailout like the one in 2008 never happens again.
[Your Name Here]
Photo Credit: bullmouse1912 via DeviantArt