Reporting from Washington and New York - In the most dramatic step yet to curtail huge pay packages for executives on Wall Street and elsewhere, the Obama administration plans to slash the compensation of those running the seven biggest recipients of federal bailout money.
The action, to be announced as early as today, would on average reduce the total compensation of the 25 highest-paid executives at each company 50% from what they received last year, according to people familiar with the decision.
Cash pay -- salaries plus cash bonuses -- would plunge 90% on average. Some of the lost cash pay would be replaced by grants of stock that the executives would have to hold for a set period before selling.
The plan applies to companies that have been given "exceptional" assistance -- tens of billions of dollars each -- under the Treasury's $700-billion Troubled Asset Relief Program.
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