A look at executive pay at GMAC LLC, the financing arm of General Motors Corp. (GM), opens a window into how the government's bailout program for banks is curbing bonuses.

In the third quarter, while the company was engaged in an epic struggle to survive, it paid executives, many of whom were new to their jobs, $28 million in what it called retention payments to make up for the de minimis value of their long--term incentive plans. Chief Executive Al de Molina received $4.64 million.

Fast forward several months to the end of the year: The company secured a lifeline by turning itself into a bank, allowing it to receive $5 billion under the U.S. Treasury's Troubled Asset Relief Program. Senior executives received year-end bonuses of $10 million in total, averaging only $476,000 a person. De Molina and three other top executives received nothing.

These four are "the same team that successfully led GMAC through a series of actions over the past year to stabilize the company, including pursuing the bank holding company path," said Gina Proia, a GMAC spokeswoman.

GMAC said the annual bonuses paid at year end to the 21 senior executives are compliant with terms set by the Treasury for firms receiving federal funds.

These payments come amid legislative efforts to curb executive bonuses in the wake of public furor over payouts to American International Group Inc. (AIG). Following a $173 billion federal bailout, AIG paid $165 million in retention bonuses to employees working in the unit responsible for the financial transactions that led to the company's troubles.

Other companies receiving government funding, including Fannie Mae (FNM), Freddie Mac (FRE) and Bank of America Corp.'s (BAC) Merrill Lynch acquisition, have also come under fire for executive bonuses.

For GMAC, year-end bonuses to the 21 executives didn't exceed $1 million for any one individual. Eighteen of the 25 top executives had held their current positions for less than 18 months at the company.

For instance, de Molina joined GMAC in August 2007 as the company's chief operating officer and was promoted to chief executive in April 2008. His base salary totaled $1.2 million last year, according to regulatory filings. In 2007, he drew a salary of $386,923 and received a year-end bonus of $900,000.

Aside from de Molina, the other three top executives who didn't get year-end bonuses were Robert Hull, chief financial officer; Sam Ramsey, chief risk officer; and Bill Muir, GMAC's president.

The $28 million GMAC paid to executives in the third quarter of 2008 was in cash, according to its annual report. The executives' long-term incentive plans were rendered worthless as GMAC battled a frozen debt market and rising losses.

The payments include $2.32 million each to Hull and Ramsey; $1.74 million to Muir; and $696,000 to Sanjay Gupta, GMAC's chief marketing officer.

These payouts were determined ahead of a debt restructuring of $38 billion in November. This debt exchange was a central plank in the lender's efforts to turn into a bank and receive government aid.

"In light of the disruptive financial markets and the need for additional refinancing activities, retention of key executives was of paramount importance," GMAC said about these payments in its annual report.

In addition, Ramsey and Hull received bonuses, or so-called discretionary spot awards, in June, of $1 million and $250,000, respectively. These payments, made before GMAC garnered bank status, were in recognition of the executives' efforts in a massive refinancing - including a $14 billion debt restructuring - that GMAC finished in June last year. Ramsey earned a base salary of $575,000 in 2008; Hull $500,000.

Also, Gupta earned a little over $1.26 million in bonuses in 2008, split between a $700,000 sign-on bonus and a $562,500 year-end bonus. His base salary in 2008 totaled $333,333.

The company's lending operations shrank dramatically last year amid prohibitive borrowing costs fueled by the freeze in credit markets and its sliding credit ratings. Losses piled up at GMAC and its mortgage unit.

To survive, GMAC sought bank registration, which it received on Dec. 24, giving the cash-strapped lender access to federal funds and allowing it to borrow at cheaper rates.

The $5 billion capital infusion from the Treasury was seen as critical for both the lender and co-owner GM, which uses GMAC to finance car buyers and dealer inventories. GMAC is jointly owned by GM and an investor group led by private-equity firm Cerberus Capital Management LP. GM and the investor group will significantly scale back their ownership in GMAC as a condition of the lender becoming a bank-holding company.

For the fourth quarter, GMAC posted net income of $7.46 billion, aided by a $11.4 billion gain from the bond exchange it commenced in November. Its quarterly profit stanched five straight quarters of losses totaling $7.9 billion.

But without the gain from this debt restructuring, GMAC's auto finance unit posted a fourth quarter $1.31 billion loss, while mortgage unit Residential Capital LLC bled $1.7 billion.

Eric Feldstein, GMAC's former chief executive, and James Jones, ResCap's former president, left the company in 2008. Severance payments, determined before GMAC's bank status, for Feldstein totaled $5.09 million and $2.11 million for Jones, according to regulatory filings.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com