Monday, April 9, 2012
On April 6, 2012, the Acting Special Master for TARP Executive Compensation, Patricia Geoghegan, released 2012 compensation determinations for the “top 25” executives at the three remaining companies that received exceptional Troubled Asset Relief Program (TARP) assistance—AIG, Ally Financial (formerly GMAC), and GM.
1. Overall CEO Compensation Frozen at 2011 Levels: The overall CEO compensation packages payable by AIG, Ally Financial and GM have not increased. Although there has been some modification in the mix of stock salary and long-term restricted stock for the CEO group, the overall amount of CEO compensation is frozen at 2011 levels.
2. 2012 Pay Packages Follow the Framework Established in 2009-2011: As in the prior determinations, most pay (83 percent overall in 2012), including target incentives, is in the form of stock, tying the ultimate value of the compensation to company performance. Transferability of the stock remains subject to deferral over a period of three years, and hedging of the stock compensation remains prohibited. Bonuses are subject to clawback. Cash salary continues to be limited—in most cases to $500,000 or less. The $25,000 cap on perquisites continues to apply.
3. Companies Have Made Progress Repaying Taxpayer Investments: AIG has reduced its obligations to the U.S. government (including through cancellation of undrawn commitments) by more than 75 percent. Treasury has also recovered nearly half of the TARP funds invested in GM and nearly one-third of the TARP funds invested in Ally Financial through repayments and other income.
4. ‘Top 25’ Compensation Packages: The group of 69 executives consists of the five senior executive officers and next 20 most highly compensated employees (based on 2011 compensation) at the three companies, minus six departures since January 1, 2012. Of that total, 48 individuals were also in the 2011 “top 25,” and 21 are new members of the group. Some individual compensation packages increased, some decreased, and some remained at 2011 levels. Overall the cash compensation for these 69 individuals decreased 18 percent and their total direct compensation decreased 10 percent from 2011 levels. For the individuals in the “top 25” in both 2011 and 2012, cash compensation increased 1 percent and total direct compensation decreased 2 percent. For the individuals new to the “top 25” group for 2012, cash compensation decreased 47 percent as compared to the cash they received for 2011, and total direct compensation decreased 30 percent as compared to 2011.