REPORT: Chrysler working to skirt federally-manded $500,000 executive salary cap
As previously reported, once Chrysler dipped its beak into the Federal coffers, the top 25 executive salaries would be capped at $500,000 per year. However, it seems the bankrupt automaker's new parent has found a way around the salary limitation by making the senior Chrysler officers Fiat employees.
ABC News dug through the Chrysler's bankruptcy documents and found "Any such seconded officer may receive supplemental employment compensation from Fiat ... notwithstanding any 'cap' on compensation payable to such officer ... under any Law, rule or policy applicable to the Company."
The Treasury Department isn't responding to questions about whether Fiat's plan is lawful and neither Chrysler nor it's new Italian suitor has said which, if any, of its employees will be "seconded" or what compensation will be made. Naturally, this report won't sit well with the MSM, not to mention the nearly 800 Chrysler/Dodge/Jeep dealers that were axed earlier today.
[Source: ABCNews via TTAC | Image Source: Sean Gallup]
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Reader Comments (Page 1 of 4)
pikp[[p[[ 8:42PM (5/14/2009)
Who cares!
To attract qualified people to manage the company and keep them from working for someone else you will need to pay them more than $500,000.
This marxist idea Obama has of making big business, credit card companies, and financial companies the enemy is stupid and dangerous. If Americans are screwed its because they screwed themselves. Its NOT the fault of anyone else contrary to what the idiot in the White House thinks.
Its bad enough the government has taken over several banks, mortgage companies, insurance companies, and now the auto industry - not to mention spending us into bankruptcy which Greenspan himself called, wealth redistribution - that's all deficit spending is!
Wake up people.
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Sean 8:43PM (5/14/2009)
Funny, that kind of pay doesn't seem to be a problem in Japan.
danotoriousb 8:47PM (5/14/2009)
Wait. Why should we pay them more than 500,000? Hell, why should we even pay them 500,000? They obviously have no idea what theyre doing so what makes them so special that we should pay them 500,000?
Sounds to me like you just wanna rant about Obama, and believe me, you have like 3 years and then some to go about doing that, so dont get ahead of yourself. Who knows, if we're lucky you might have 7 years of it. =)
Venom 9:12PM (5/14/2009)
You mean the same top talent that ran the auto industry and the banking industry into the ground and then asked for our money to bail them out?
That top talent?
slicecom 9:15PM (5/14/2009)
"To attract qualified people to manage the company and keep them from working for someone else you will need to pay them more than $500,000."
That 'logic' is what got us into this mess in the first place. The CEO's ran the American car companies into the ground and made millions per year while doing it.
Look at the CEO's of the MUCH BETTER RUN Japanese car companies. None of them make anywhere near that much and they do a way better job than the "qualified to make over $500k per year" execs you think we need.
csquirrel 10:16PM (5/14/2009)
It's not a Marxist idea if you take TAXPAYER money to save your failing business and sign a legally binding contract saying you won't pay above $500,000.
Your fear mongering and obvious Obama hatred swings and misses buddy. Until they become financially solvent and pay back their loans to us, the American People, I'd say $500,000 ought to be enough.
To quote you, "Who cares!"
Well obviously you do with your little rant, lol. If "Who cares!" solved anything then this mess wouldn't have existed in the first place. "Who cares!" is why we're here pal.
Judy Zik 10:27PM (5/14/2009)
If qualified people had been running Chrysler we wouldn't be having this discussion. I highly doubt anyone left on their payroll is worth more than $500,000 a year.
Then again as long as Fiat is the one footing the bill who cares. Cuts down on costs at Chrysler and keeps bailout tax money from paying inflated salaries.
fizzandpop 11:00PM (5/14/2009)
Absolutely not. What we need is a Manhattan Project for the auto companies. Lock the brightest and the best away for two years and get this problem fixed. Not one of these people should have a "C" level position anywhere on their resume and it should be made very clear that they are working for the country, not for themselves.
cdwrx 1:20AM (5/15/2009)
You guys should read some of pikp[[p[['s (great screen name btw) other posts. Dude is way out on the fringe and into conspiracy theories. It's actually pretty entertaining if you can detach yourself from his madness.
zamoranomejash 8:15AM (5/15/2009)
this mess won't work for $500k a year. If Chrysler can't figure out a way around it then they'll be stuck with fresh MBA grads and Obama running the show.
It' very nice policy a company.
zamora
Auto Finance
Frank 9:05AM (5/15/2009)
Sean:
"Funny, that kind of pay doesn't seem to be a problem in Japan."
In Japan there are certain perks that execs get that is not reported here as income, but under US law would be income. Some get a company house, many get free golf club memberships. You might say big deal my neighbor has a gold club membership. In Japan because land is so limited (it's an island after all), putting asside land for golf (which hugely popular in Japan) is very expensive, therefore the membership fees are astronomical, something we would never pay for, unless the club was something like Augusta or Hilton Head. In Japan ANY golf club is outrageous in price, and the nice ones are beyond outrageous. That's why the Japanese vacation in Hawaii and play golf there. It's so cheap for them they think they died and gone to Heaven. Just like when we Americans go overseas and get cosmetic or other surgery for 1/2 or 1/3 the price here.
I don't know if medical benefits are counted as compensation like it is here the US. The TOTAL compensation for execs in Japan is lower but if you only look at the pay you are not getting the whole picture.
Sanders 10:29AM (5/15/2009)
"To attract qualified people to manage the company and keep them from
working for someone else you will need to pay them more than
$500,000."
No way. That statement is meaningless. There's no correlation
between being labeled as qualified, what you are payed and eventual performance.
You are forgetting the human factor. People screw up. Period. If you believe that statement, then ponder the following:
If engineers making $80K-90K a year brought us the incredible fighter
that is the F22 Raptor, then $500K 'qualified' engineers should bring us the USS
Enterprise, warp engines, phasers and all.
Or consider a biochemist making 80K-90K a year who came up with
Lipitor or some other live-saving drug. At $500K a year, I would
expect the cure for cancer, AIDS and Alzheimers--all in one week.
What did $500K (or more) a year recently get us from the financial
world? A crashed economy!
You would think that a 'qualified' individual in that industry would:
A. Not be foolish enough to engage in questionable practices and transactions.
B. Be smart enough to see 'all hell breaking loose' coming down the street.
C. And most importantly, being able to PREVENT it in the first place.
JDJase 12:30AM (5/16/2009)
I'm all for high executive pay and all...but when Chrysler is trying to get everyone angry at its creditors because it won't let Chrysler out of its debt, it probably not a good idea to say "we don't want to pay the money we owe, but we DO want to pay our execs more cash!"
danotoriousb 8:41PM (5/14/2009)
Somebody, punch Chrysler in the face.
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R Nair 10:56PM (5/14/2009)
ROFLMAO
Frank 8:29AM (5/15/2009)
I guess Obama will have to be satisfied with just limiting the pay of GM execs (unless Carlos buys them) :-)
Valentino Amoro 2:09PM (5/15/2009)
What you have here is a conundrum. (FYI I work at MSFT so I'm a corporate worker)
Normally, a firm is assumed to work in it's best interests and reward it's employees based on performance. In the case of a performance down turn, the cost is shared (unequally) among the employees (shareholders also but that is not the point here), again, with the differential based on performance. Same thing for profitable times. For example, MS is a highly profitable public company adding significantly to the Fed's coffers and the economy but to weather the downturn wages are pre-emptively frozen however a performance based compensation exists. Noble, not really, it's in MSFT's economic interests. Shady, not at all.
In the case of Chrysler, the firm is unable to support itself and is bankrupt. Normally is should cease to exist and be liquidated. Firms are generally selfish entities working on the capitalist principle where each person in it tries to take care of their own interests. Good management and a good market will ensure that this effort is aligned to a positive effect. Normally, it's the best system we have. However, in the case where the survivial of the firm is largely due to the Government and Public's interest in preserving jobs, you have a conflict of interest. In this case employee's are required to switch to a 'charitable' mode as is the firm as it isnt economically viable at that point. Wage restrictions are fair enough IMHO, given that they would not have had the job in the first place and they are always free to look for jobs in the private sector (best of luck with that in this enviorn). Furthermore, the firm as an entity is always free to look to the private sector for loans as well -:)
Valentino Amoro 2:11PM (5/15/2009)
In this case, I see no reason to raise exec pay beyond the limit set. I am totally for exec's and a pyramidal pay scheme. I am totally for an exec in a profitable company making what the board/stock holders are willing to pay him or her. (no s&$t, as thats my career trajectory) To me it's far less distasteful than some actress aka Linsday Lohan or a grown man running after a pig skin making millions. That said, the exec position along with the firm exists for the sake of retaining jobs, that only happens through maximizing the government money that is being poured into supporting the firm therefore the pay restriction and other conditions are totally OK, until a) the company finds its way back to profitability b) pays off it's Government liabilities or interest on it.
What Chrysler and AIG are doing is pathetic. I would rather they went bankrupt.
Sean 8:43PM (5/14/2009)
They have ABSOLUTELY NO MONEY and they want to pay the people that got them in to this mess millions of dollars a year?
Let them die.
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Nathan 8:43PM (5/14/2009)
The kind of talent needed to save Chrysler from this mess won't work for $500k a year. If Chrysler can't figure out a way around it then they'll be stuck with fresh MBA grads and Obama running the show. Scary thought.
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