DETROIT (Reuters) —
The U.S. Treasury last year permitted top executives at General Motors Co and Ally Financial Inc to collect "excessive pay" while those companies were part of a taxpayer-funded government loan program, a special inspector general reported on Wednesday.
The Treasury responded that the report contained "many inaccuracies and omissions," saying the department balanced limits on executive compensation "with allowing companies to repay taxpayer assistance."
According to Christy Romero, special inspector general for the U.S. Troubled Asset Relief Program, "Treasury significantly loosened executive pay limits resulting in excessive pay for (the) top 25 executives" at GM and Ally while "taxpayers were suffering billions of dollars of losses" on loan repayments and share sales, said the report, prepared for Treasury Secretary Jacob Lew.
Treasury said executive pay packages for the top executives at GM and Ally were "restricted" while those companies were receiving government funds from the Troubled Asset Relief Program, known as TARP.
The 2009 rescue of the largest U.S. automaker was implemented under TARP, which disbursed billions of dollars to failing U.S. companies. As part of the bailout, Treasury took a substantial stake in GM and sold the last of its shares in December.
In April, Treasury said it lost US$11.2 billion on the US$49.5-billion GM bailout.
In a statement, GM said: "We remain grateful for the assistance we received from taxpayers. While the U.S. Treasury owned GM stock and ever since, we have worked to align executive compensation with the long-term interests of stockholders and we will continue to do so."
Ally said in a separate statement that it was "pleased to have been able to more than repay the American taxpayer" despite "significant restraints" imposed by TARP. Ally also said its executive compensation plan "meets the requirements for TARP companies."
The U.S. Treasury still holds a 13.8-per cent stake in Ally.
GM chief executive Dan Akerson, who helped revamp the automaker after its 2009 government-sponsored bankruptcy and taxpayer-funded restructuring, was paid US$9 million in cash and stock in 2013, according to regulatory filings. Akerson retired in January.
His successor, Mary Barra, was paid US$5.3 million in cash and stock in 2013, when her title was executive vice-president.
GM noted earlier this year that it put in place "a more appropriate performance-based compensation structure" after Treasury sold its GM shares.
The automaker also said its executive compensation plan is pegged to similar plans at a group of 20 large multinational companies in various industries, including General Electric Co, Ford Motor Co and Chevron Corp.