Charities Fear New Pay Limits Will Hurt Executive Donations
Exactly how donors will react to new rules affecting their pay remains to be seen. But the emerging political climate could make many of them hesitant to dole out cash when their compensation remains uncertain. However the rules are implemented, boardrooms — even at companies that haven't received bailout money — appear poised to revise pay policies to reflect new political realities.
The evolving compensation landscape isn't limited to Wall Street. General Motors Corp., the cash-strapped Detroit auto giant, will likely need more government aid to avoid bankruptcy after already receiving billions of dollars in loans.
GM Chief Executive Rick Wagoner lowered his annual salary to $1 and relinquished any bonus for 2008 and 2009 as a condition of that aid. In response to lawmakers' fury over big executive paydays, GM also cut total cash compensation for its next four senior executives by 50%.
Detroit's cultural institutions, homeless shelters and other nonprofits are already cutting back as the city's auto makers retrench and scale back giving. Pay curbs on top of the Motor City's economic pain "will certainly have an impact," on giving, says Peter Remington, president of The Remington Group, a nonprofit consulting firm in Beverly Hills, Mich.
A GM spokesman declined to comment on executives' giving plans, saying "individual charitable giving is a private matter."