Extending its executive pay limits, the United States Treasury Department has announced that second-tier executives at General Motors and GMAC will be limited to $500,000 in annual compensation. Last February the U.S. government limited the pay to the top 25 executives at GM, GMAC, Chrysler and Chrysler financial.
The Treasury’s latest initiative will limit the pay of the next 75 highest-paid executives at GM and GMAC to $500,000, according to Automotive News. Most executives will be limited to about 45 percent of their original salary, although some will receive 50 percent. The limitations will last for at least three years.
Additionally, the second tier executives will be forced to take any cash incentives over a two-year period to avoid large lump-sum payments. Bonuses not tied to performance have also been banned by the Treasury Department.
Chrysler and Chrysler Financial were left out of the latest round of restrictions as no second tier executives at either company currently take home more than $500,000 in annual salary. Chrysler’s top executives managed to steer clear of the Treasury’s restrictions as they are technically paid by Fiat.
