Cut the pay, and they still stay

Most bank execs who saw diminished salaries still stuck with their companies, a study shows.

By Kim Peterson Mar 23, 2010 3:01PM
Shredded cash © Spencer Platt/Getty ImagesLost in all the health care hullaballoo this week is an interesting finding released by the government: Of the 104 senior bankers whose pay was drastically reduced by federal regulators, nearly 85% are still at their companies.

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.

3Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

126
126 rated 1
286
286 rated 2
474
474 rated 3
680
680 rated 4
626
626 rated 5
609
609 rated 6
620
620 rated 7
462
462 rated 8
304
304 rated 9
132
132 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
BIDUBAIDU Inc10
BXTHE BLACKSTONE GROUP L.P10
CELGCELGENE CORP10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.