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Obama administration plans salary cuts for bailout firms

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by Kay Mitchell
Obama administration plans salary cuts for bailout firms

The Obama administration is proposing to cut the salaries of top executives at firms which have received billions of dollars in Government aid.

The institutions that are affected are Bank of America, American International Group (AIG), Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial.

According to reports, these seven companies will see their 25 highest paid executives have their salary cut by an average of 90% percent from last year.

However, the proposals do not affect smaller companies or those who have repaid their bailout money – such as banking giants Goldman Sachs and JPMorgan Case.

There has been public outrage about the payouts made to firms that have had to go to the US Government for financial assistance. Many of the firms would have collapsed without the aid.

Earlier this year, US President Barack Obama was said to be “outraged” by plans that beleaguered insurer AIG was paying executives bonuses totalling $165 million.

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News posted: October 22, 2009

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