The U.S. Treasury Department disregarded its own guidelines by allowing large pay increases for executives at three firms bailed out during the financial crisis, a report released Monday says.
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.
Christy Romero, the special inspector general for TARP, said the guidelines say compensation should not exceed the 50th percentile of pay for executives in similar positions at other financially distressed companies.
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