Lavish executive compensation and bonuses were believed to be curbed for corporations receiving Troubled Asset Relief Program funding. However, a new report by the Troubled Asset Relief Program inspector general has found that isn't really the case in the least. Article source:

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Paychecks always big as an executive

When the TARP was initially started, most people grumbled that American tax dollars were being used to bail out the large corporations responsible for their own ruin. On top of it, there were exec bonuses still going out in spite of the fact that the federal government was paying for anything. Nobody seemed to like the program.

However, it has come to light that the Treasury Department didn't have much of a problem with extravagant executive payment, less several scapegoats. According to the Wall Street Journal, it has been found that almost 40 exec compensation packages of $3 million or more were directly approved by the government's accounting division, of which 16 received $5 million or more in 2012.

Reports of salaries released

The treasury had to release a report about the compensation packages approved. There has been a ton of criticism from Special Inspector General for Troubled Asset Relief Program Christy Romero because Patricia Geoghegan has been allowing massive salary increases to be approved at the firms that got Troubled Asset Relief Program funds.

There was a lot of criticism being handed to the organizations that got the most executive compensation packages. This involved corporations such as American International Group, Ally Financial and GM.

The federal government capped salaries with a few variances that might be approved through the TARP program between 2007 and 2012.

Limitations


Businesses that used TARP had a $450,000 limit of cash in exec compensation packages at first. There were sixteen employees that got $5 million bonuses in 2012 though including some at Ally, AIG, and General Motors. Top executives still got a ton of money even if they did not breach the barrier, according to the Washington Post. About $450,000 in cash was given to them, which is still 10 times the national median household income.

Dan Akerson, CEO of GM received $1.7 million in cash and $7.3 million worth of stock in 2012.

Those 16 top workers pulled a collective $6.2 million in raises, which the government's "bonus czar," Patricia Geoghegan, signed off on.

Sake of retention

A lot of people suspect that the companies are getting larger pay packages for executives in order to keep them from leaving and going to other companies. This is in accurate though, according to Geoghegan.

Sources

Washington Post

USA Today

Wall Street Journal