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US 'plans bailout firm bonus cut' US 'plans bailout firm bonus cut'
(about 3 hours later)
Firms in the US that benefited from government bailout cash will be told to drastically cut bonuses for their highest paid executives, a report says.Firms in the US that benefited from government bailout cash will be told to drastically cut bonuses for their highest paid executives, a report says.
The seven companies who received most aid from the US Treasury will have to slash pay of their 25 best-paid workers by up to 90%, Associated Press said.The seven companies who received most aid from the US Treasury will have to slash pay of their 25 best-paid workers by up to 90%, Associated Press said.
The totals paid to each firm's 125 top earners would be halved under the plan.The totals paid to each firm's 125 top earners would be halved under the plan.
As in the UK, there has been widespread anger at bonuses paid by firms that needed government help to stay afloat.As in the UK, there has been widespread anger at bonuses paid by firms that needed government help to stay afloat.
AP named the seven companies as Bank of America, AIG, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial.AP named the seven companies as Bank of America, AIG, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial.
'Offensive''Offensive'
MARDELL'S AMERICA With a growing sense of anger at the distance between Wall Street and Main Street, and a sense of unfairness that the bosses who'd helped fuel the crisis were getting rewarded for it, the administration obviously felt it had to act Mark MardellBBC North America editor Read Mark's thoughts in full
The BBC's Mark Mardell said that under the plans, bank executives would also need special permission to claim perks worth more than $25,000 (£15,000) per year - including country club memberships and company cars.The BBC's Mark Mardell said that under the plans, bank executives would also need special permission to claim perks worth more than $25,000 (£15,000) per year - including country club memberships and company cars.
But, our correspondent says, they may not lose all the money.But, our correspondent says, they may not lose all the money.
The plan would be to pay some of it in stocks that executives would not be able to touch for a couple of years.The plan would be to pay some of it in stocks that executives would not be able to touch for a couple of years.
President Barack Obama has been outspoken about the payment of bonuses - when the rest of the country is still suffering from the fall out of the financial crisis.President Barack Obama has been outspoken about the payment of bonuses - when the rest of the country is still suffering from the fall out of the financial crisis.
Earlier this year, the president said he was "outraged" by plans by bailed-out insurer AIG to pay $165m bonuses pledged to executives.Earlier this year, the president said he was "outraged" by plans by bailed-out insurer AIG to pay $165m bonuses pledged to executives.
And this week his senior aide, David Axlerod, called the payouts "offensive", telling the ABC that firms "ought to think through what they are doing and they ought to understand that a year ago lot of these institutions were teetering on the brink and the United States government and taxpayers came to their defence".And this week his senior aide, David Axlerod, called the payouts "offensive", telling the ABC that firms "ought to think through what they are doing and they ought to understand that a year ago lot of these institutions were teetering on the brink and the United States government and taxpayers came to their defence".