It is crony capitalism at its worst. Executives at taxpayer-bailed out firms received Treasury Department-approved pay hikes — your hard-earned tax dollars at work.
The Special Inspector General for the Troubled Asset Relief Program said Treasury approved all 18 requests it received for executive raises at American International Group Inc., General Motors Corp. and Ally Financial Inc. Of those requests, 14 were for $100,000 or more. One raise, for the CEO of a division at AIG, was for $1 million.
The three firms together received nearly $250 billion from the bailout fund. Only AIG has fully repaid its $182 billion bailout.
The report says Treasury bypassed rules under the 2008 bailout that limited pay. Treasury approved raises that exceeded pay limits and in some cases failed to link compensation to performance, it notes.
To be clear, I do not believe that executives in general are “paid too much” as many on the Left do. In the private sector, pay packages, whether for entry-level contributors or high-level executives, are a function of the marketplace. When a willing employee meets a willing employer, there is a meeting of the minds over the compensation package. What is objectionable about the pay hikes for execs at the bailed-out firms is that public money funded the raises for firms that could not survive in the marketplace. And, as the story notes, the raises “failed to link compensation to performance.”
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