Uncle Sam Slashing Exec Pay

The government will order pay cuts for top executives at firms that took the most money from Uncle Sam.

The New York Times, citing a source close to the decision, reports that the seven companies that took the most money from the government will have to cut the cash for their top-25 earners as much as 90 percent.

That cash, for some, will be replaced by stock they’re restricted from selling immediately.

Compensation, including bonuses, for all executives at the firms will drop 50 percent.

The firms are Citigroup, Bank of America, American International Group, General Motors, Chrysler, and the two automakers’ financing arms.

No top executive in the financial-services division of AIG, the group where risky credit-default-swap bets led to the near collapse of the company and a $180 billion rescue by the feds, will make more than $200,000 a year. The government will also pressure AIG to reduce $198 million in bonuses promised to financial-division employees.

Any executive at one of the companies who seeks special perks, like country club memberships or private planes, worth more than $25,000 a year will have to get the government’s permission.

The Times reports that the official pay announcement is expected sometime within the next “few days.”

Special pay master Kenneth Feinberg has arrived at the restrictions in an atmosphere of renewed furor in Washington over Wall Street pay packages. Several firms that last year received significant, though smaller, chunks of money at the height of the financial crisis are planning on going back to bonuses as usual.