Washington - A government auditor harshly criticized the Treasury Department for approving "excessive" pay packages for top executives at three companies that received large government bailouts.
Christy Romero, the special inspector general overseeing the $700 billion Troubled Asset Relief Program, criticized the Treasury for approving pay raises at General Motors Co., Ally Financial Inc. and American International Group Inc.
The report released Monday was critical of the Treasury's special master overseeing executive pay at companies that got very large bailouts: Cash salaries of $450,000 or more were approved for 94 percent of the top 25 employees at AIG, GM and Ally.
"While taxpayers struggle to overcome the recent financial crisis and look to the U.S. government to put a lid on compensation for executives of firms whose missteps nearly crippled the U.S. financial system, the U.S. Department of the Treasury continues to allow excessive executive pay," the report said.
The executives at GM, Ally and AIG "continue to rake in Treasury-approved multimillion-dollar pay packages that often exceed guidelines" previously announced, the report said.
The Treasury approved all 18 pay raises requested by the companies.
In December, AIG repaid its government bailout and is no longer subject to the pay restrictions.
Patricia Geoghegan, the Treasury's "pay czar," agreed to shift more pay away from longer-term incentive pay.
She removed long-term restricted stock for senior executives, including the CEOs of AIG, GM and Ally. In total, she removed long-term restricted stock from 24 of the 34 employees' pay packages, and for all but one of the 24 employees, replaced it with stock salary, as requested by the companies.
In total, she approved pay packages worth $5 million or more for 23 percent of the top 25 employees at AIG, GM, and Ally..
The audit said the pay raises ranged from $30,000 to $1 million — 1 percent to 23 percent.
GM and Ally each proposed nine pay raises, and AIG proposed one pay raise worth $1 million.
Treasury approved raises of 15 percent to 23 percent without any further detail or analysis for four employees "on the basis that they were among the individuals that GM's CEO most relied on, and they had received significant promotions or increased job responsibilities," the audit said.
The audit said that for one employee who received a cash salary of $600,000 in 2011, Treasury approved an additional $50,000 in cash in 2012.
"When asked why the employee received the raise,(Treasury) told SIGTARP that GM wanted to retain the employee and 'do a little extra for him,'" the report said.
GM has long complained about the pay restrictions, including in their 2012 proxy statement.
In March, weeks before the Treasury pay czar approved the 2012 pay packages, GM CEO Akerson met with Treasury Secretary Geithner — without the pay czar present — asking Treasury to release GM from Treasury's pay limits by lifting the restrictions, the audit said.
Previously, Akerson's meeting had become public with Geithner, but GM declined to discuss the subject matter.
Geithner rejected GM's request.
The special master removed from Akerson's pay package incentive compensation tied to meeting performance criteria, shifting the same amount to stock salary that is earned immediately, the report said.