Cut the pay, and they still stay
Most bank execs who saw diminished salaries still stuck with their companies, a study shows.
This appears to contradict the banks' claims that cutting executive salaries would cause everyone to up and leave in a mass exodus of talent.
Pay czar Kenneth Feinberg is releasing these findings as he gives the green light to pay packages for the 25 highest earners at banks that received government bailouts, The New York Times reports. He's still figuring out what the next 75 highest-paid will receive.
He's focused on setting pay at five companies that received more than one bailout and still haven't repaid the money. Those include American International Group (AIG), GMAC Financial, General Motors and Chrysler.
General Motors wanted to pay 20 employees at least $500,000 in cash, the Times reports. But Feinberg only allowed eight executives to go over that threshold, including chief executive Ed Whitacre. He's getting a $9 million pay package, but only $1.7 million of that is in cash.
No one at Chrysler or GMAC is getting more than $500,000. GMAC's chief executive is getting paid entirely in cash, according to the Times.
So why aren't more people leaving? The Times cites a soft job market, corporate loyalty and personal pride.
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The company is lowering its soda machine projections for the second half of the year, however.
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