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Large Pay Cuts In Store for Many Top Executives

By: CBS News Email
By: CBS News Email

At the companies that are surviving on taxpayer bailouts, hundreds of workers will see their compensation cut in half.
Where million dollar pay checks have long been a way of life, many salaries will be capped under $500,000 dollars.
The Treasury Department is expected to announce it will slash paychecks for 175 employees at the firms that have not paid back their bailout money.
"The proposed actions are justified; you know we're all tightening the belt," says magazine executive Ken Pecca.
The seven companies affected include Citigroup and Bank of America, plus GM and Chrysler, where salaries for most of the top executives will be cut in half.
Some of the toughest restrictions will be at the insurance giant AIG, which has received well over $100-billion dollars in loans. At the financial products unit, no one will get more than $200,000.
"It says, 'Guys, you have to understand that you can't party on like it's 2007. If you're going to take taxpayer dollars, then the game has to change,'" says Elizabeth Warren with the TARP Oversight Committee.
And it's not just salary...corporate perks will be cut too.
That includes benefits that used to be standard at places like Bank of America, like private planes and club memberships.
Under the new plan, if an executive's perks amount to over $25,000, they'll need permission from the government.
Outside of the banking world, people say it's about time some fat cats feel the pain of the slumping economy.
"Somehow the imbalance, the general imbalance, seems worse than ever," says Mike Kresch, another magazine executive.
That imbalance stands out in the face of the latest unemployment snapshot.
While bankers grapple with pay cuts, just last week more than half a million Americans filed new claims for jobless benefits.


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