Treasury Watchdog Urges Lower GM Pay

The special inspector general overseeing the U.S. financial bailout program tells Congress that the Dept. of the Treasury should reinstate its original policy of capping cash salaries at $500,000 for most executives of rescued companies.

In testimony on Tuesday to the House Oversight and Government Reform Committee, inspector Christy Romero asserted that Treasury officials have failed to rein in "excessive pay" at the three companies that still owed money to the government last year.

Nearly a quarter of the top executives as General Motors, Ally Financial and insurer AIG earned more than $5 million in 2012, Romero says. (AIG compensation will no longer be monitored because the company repaid it U.S. debt in December.)

Treasury pay czar Patricia Geoghegan defended her record. She said the department tries to balance pay restraint with the companies' need to remain competitive in attracting top talent.

Compensation for GM's top 25 managers is in the midrange of what executives in similar jobs elsewhere earn, according to Geoghegan.