New Chrysler chief to face pay cap

Chrysler CEO Robert Nardelli’s successor is almost sure to face a cap on his or her compensation in exchange for the federal government’s assistance for the troubled automaker.

The new Chrysler CEO, expected to be installed once the company completes its partnership with Italian automaker Fiat, will likely not earn more than $500,000 per year, the Detroit Free Press reported Tuesday.

Executive compensation became a hot button issue after the government’s bailout of a number of financial and industrial companies. Most notably, the American Insurance Group (AIG) received intense scrutiny for handing out bonuses to executives while on the government dole.

Under Treasury rules, the new Chrysler chief could not earn more than $500,000, but could receive restricted stock shares which could only be sold after the company repays its loans to the government.