LeftLaneNews

GM to remain under pay czar beyond debt payoff

Throughout the bankruptcy and restructuring process of GM, the Treasury Department has played a supervisor role for the automaker. The Treasury Department was in charge of monitoring pay within GM during the restructuring process, due to the government funding given to the ailing automaker.



Currently, Ken Feinberg, who is the government's pay czar, is responsible for monitoring and approving the pay for the top 25 executives at GM, Chrysler Group LLC, Chrysler Financial, GMAC Inc. and three major banks, according to The Detroit News.

Ron Bloom, who fills the role of auto adviser for the Obama Administration, says that GM will not escape government-imposed pay caps simply because they pay back the government loans. Bloom went on to say that at this time it is not clear when the government will stop overseeing pay at GM.

"It's good news for taxpayers and good news for the company," said Bloom.

"GM has $13.4 billion in unused taxpayer funds in escrow. The Treasury Department could have given GM until June 2011 to repay the loans, if it felt GM needed the extra cushion," said Bloom.

Beyond the taxpayer funds in escrow, and the funds that GM is set to pay off by June, there are additional funds that make up the total bailout of $50.5 billion for GM. The government exchanged $42 billion in bailout loans for stock in GM, resulting in a 60.8 percent controlling interest in GM.

Whether or not the taxpayer will see their money again now rides on the success of the automaker. If GM succeeds, the government could in theory recoup most, if not all of its investment in GM.

The Detroit News says that according to some oversight panel estimates, taxpayers could still lose $20 billion or more due to the GM bailout.