By calling the top executives of the new Fiat- Chrysler partnership Fiat employees, rather than Chrysler employees, the Milan/Detroit tie-up will be able to avoid United States Treasury restrictions on executive pay. In February, the Treasury confirmed that companies receiving government aide would have to limit top executives to $500,000 in compensation, not including restricted stock shares.
As part of the $4.1 billion in low-interest government loans Chrysler received, the automaker had to agree to limit its top 25 executives’ pay – and those executives had to agree that they could not make any claims against the government for the new rules.
According to the Detroit Free Press, the top officers will be deemed Fiat employees who are “seconded” to Chrysler . They’ll be able to take their pay from Fiat, not Chrysler, which will help them avoid the $500,000 salary cap.
Fiat CEO Sergio Marchionne’s total compensation was about $4 million last year – more than his Detroit counterparts, but fairly typical for someone leading a profitable automaker.
