• May 5, 2009
The next chief executive of Chrysler will be tasked with bringing the company out of bankruptcy, restructuring into a profitable business, repaying government loans (if and when they do so at all), integrating Fiat technology and retaining jobs wherever possible. Oh, and he or she will have to do it all on no more than $500,000 a year. This according to the latest reports, based on new Treasury Department regulations.

In receiving funds from the $700 billion financial industry bail-out coffers, Chrysler becomes one of the first companies to fall under new regulations outlined by Treasury Secretary Tim Geithner (pictured above) that stipulate chief executives of any firms receiving said funding can't receive compensation exceeding the half-million mark. And not just the chief executive, either, but the top 25 suits in the company. The regulations don't limit the executives from receiving stock options, but with Chrysler's shares being split between Fiat, the UAW and the Canadian and U.S. federal governments, there aren't any shares to go around to offer the cut-rate execs. And to compound things, the executives have to agree to waive the right to sue the government for cutting their wages. The regulations further state that the recipient of the funds (i.e. Chrysler) is barred from owning or leasing private jets, so Fiat executives flying from Turin to Detroit will have to pay their own way. However, the regulations are ambiguous when it comes to payment for second jobs: in other words, who can say if Fiat CEO Sergio Marchionne would be capped at $500k overall if he took the helm at Chrysler, as well?

[Source: Detroit Free Press | Image Source: Win McNamee/Getty]


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 54 Comments
      • 5 Years Ago
      Maybe you all haven't seen this...

      http://www.silverbearcafe.com/private/05.09/mindingthestore.html

      It looks as though there isn't any way to police it anyway. This lady isn't aware of how she got dressed this morning.
      • 5 Years Ago
      The business person with the proficiency to turn Chrysler around has the ability to make a lot more than $500k elsewhere and not have this Herculean task on his (or her) shoulders.
      • 5 Years Ago
      $500k is salary, not other incentives. This is run the same way sports teams are run. You make most of your money outside your salary in these positions. Hell, Google pays their CEO $1 a year and he's personally a billionaire. The founders of Google are each worth more than the entire country of Laos' GDP. ONE person is worth more than an entire country.

      Sorry, I don't feel bad for a CEO 'only' getting $500k / year salary.
        • 5 Years Ago
        Mike, the founders of Google are worth billions because they sold shares in THEIR company to the public. they didn't make their billions from their salaries or income running the business. they made their billions from SELLING their business (or shares of it) to others.

        comparing the Google founders to the future CEO of Chrysler is (and i hate this expression) like comparing apples and oranges...
        • 5 Years Ago
        ahhh, not quite....

        Great analogy with Google and all, but their stock was actually worth something when the founders went public and cashed in. Not so much with Chrysler stock.

        Your right, its not the entire package, I am sure they get health insurance and a sweet Sebring to drive around. But don't kid yourself that the new CEO is going to make millions off some other benefits.
        • 5 Years Ago
        wow, you really don't get it do you?
      • 5 Years Ago
      Don't worry friends, your wage is going to be capped next. Maybe not today, maybe not tomorrow, but this sets a dangerous tone. The government should not, and does not, have the authority to tell anyone what they can make. Minimum wage is a mistake and now they go and make a maximum wage. Why doesn't anyone f*ck these guys up and not reelect them?!?!

      I love the tax credit I'm getting though. $400 bucks is awesome. Too bad I pay $204 a WEEK in taxes. So that's a loss of only $10,208 a year. So banks can get rid of mistakes, and they can continue creating money out of thin air while my living costs go up and my wages stagnate. Gee thanks Barack. You asshole. You too W.
      • 5 Years Ago
      Now that Rick Wagoner is unemployed maybe he can apply for the postion.
      • 5 Years Ago
      There are a lot of people with education and brains making only 50k a year.
      • 5 Years Ago
      ..only in my wildest dreams could I make that much coin.
        • 5 Years Ago
        Socialism.

        He should make more as he performs better and less as he performs poorer. No capping his salary. Just don't give him millions when he fails or does a lousy job.
        • 5 Years Ago
        I'm an engineer. No matter what I do I'll never make the rich cream until I get into management. It's been that way for decades. You think we were socialists under Reagan? It was same today as it was then. Gonna have to get my MBA.
      • 5 Years Ago
      so, how much will the UNION BOSSES be limited to making?

      just curios.
      • 5 Years Ago
      Atlas Shrug, here we come.

      Won't some please think of the children?!!! /sarcasm
        • 5 Years Ago
        Think of the children?
        Well, as long as the next CEO doesn't get gay married, I'm fine with it.
      • 5 Years Ago
      Typical of Government. Shutting the stable door AFTER the horse has bolted.

      The Gvt seriously believes that NEWCO Chrysler will be able to hire top 25 Execs ALL of whom will have to agree to the $500K remuneration limit with no hope of stock awards?

      You just won't get the kind of talent that NEWCO needs.
      I am all for Execs being paid minimal amounts, if their strategies bring a company down. But not everyone is like a politician who gets massive side job benefits for life after serving only one term Wanna give up your lifetime healthcare guys?
      • 5 Years Ago
      I don't care what they pay the new CEO. Chrysler has ceased paying incentives to certain dealers in a campaign to starve them of cash.

      http://www.freep.com/article/20090505/BUSINESS01/90505087/1002/BUSINESS/GMAC+could+decide+which+Chrysler+dealers+survive


      I am one of the 800. Then again- when you can stiff the Government for $7 Billion,
      why worry about the dealers you don't want anymore...?
      • 5 Years Ago
      To the taxpayers who think this is a good idea:

      You now own a ton of stock in a company that can't recruit or retain good top management. Does that sound like a good situation? Or would you rather own a ton of stock in a company that is allowed to attract and keep good people by paying market wages?

      If you're thinking that the problem is high market wages, the government could regulate all wages and limit foreign competition from companies that don't comply with our wage laws. That sounds bad because it IS bad. It's a REALLY, really dangerous path to start down.

      And I've been around many great top managers and CEOs. They actually make a huge difference in how a company runs, and they're just not going to work for wages that are far below market rates. You get what you pay for.
        • 5 Years Ago
        Yes, J, in our massively service oriented, import dependent country, our government will limit competition from foreign firms because they pay their employees too much. Moreover, most foreign companies pay their executives substantially lower than their US equivalents anyway. Way to talk about things that will never happen.

        Also, the average SALARY for an auto executive is around $800,000. That is the market-average for a an automotive company that isn't going bankrupt. Executives of failing companies don't get the same salaries as healthy companies; especially when it's on the government's dime. The TS has already affirmed the strings get cut once the company regains profitability.

        • 5 Years Ago
        While a CEO may make a big difference, I think the best are those that are actually interested in the business. If you overpay, you are more likely to get a B-school bozo who knows nothing about the actual product. Wagoner and Nardinelli, for example.

    • Load More Comments