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View Full Version : AP Study Finds $1.6B Went to Bailed-Out Bank Execs


jason
12-21-2008, 06:54 PM
http://www.nytimes.com/aponline/2008/12/21/us/AP-Executive-Bailouts.html?_r=2

Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

Rep. Barney Frank, chairman of the House Financial Services committee and a long-standing critic of executive largesse, said the bonuses tallied by the AP review amount to a bribe ''to get them to do the jobs for which they are well paid in the first place.

''Most of us sign on to do jobs and we do them best we can,'' said Frank, a Massachusetts Democrat. ''We're told that some of the most highly paid people in executive positions are different. They need extra money to be motivated!''

The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings:

--The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

--Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million.

This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives ''whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels.'' Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

--Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.

--John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options.

Banks that got bailout funds also paid out millions for home security systems, private chauffeured cars, and club dues. Some banks even paid for financial advisers. Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

At Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said.

Goldman Sachs' tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs.

dyrt
12-21-2008, 10:23 PM
This just warms my revolutionary ire.

BirdGuano
12-22-2008, 01:26 PM
That's why the government has moved a brigade homeland for anti-riot control.

They see what's coming as soon as people are hungry and figure out the Treasury was looted.

CanadaSue
12-22-2008, 01:33 PM
Yet in retrospect, in spite of all the writing to Congresscritters, phone calls, e-mails, etc. they WERE given permission to go right ahead & vote in this abortion. Proof? The re-election of most who were adamant this was the only viable solution.

In essence, in spite of the 'slowup' a bill was pased giving Paulson permission to do damned near anything he pleased with few restriction. And he did.

I couldn't believe anybody buying the whining about not being able to set too many restrictions on banks taking advnatge of the bailouts or else they wouldn't take them. If they didn't take them, they'd fail. That would have been their choice & they rightly concluded Congress didn't have the stones to hold their actions up to examination.

We did the same damned thing in Canada.

We made our beds. If we're only finding out now that the sheets are wrinkled & lumpy, it's because we were too afraid to look closely.

We have no one to blame but ourselves.

A.T. Hagan
12-22-2008, 01:53 PM
AP Study Finds $1.6B Went to Bailed-Out Bank Execs

If anyone is surprised at this I would like to know why.

.....Alan.

dyrt
12-22-2008, 09:46 PM
We have no one to blame but ourselves.Thank you. That is exactly right. The government is a reflection of society.

If people want something different then there has never been a better opportunity. A new economy is being built right now. Get out there and do something about it.

sandyd
12-22-2008, 10:39 PM
That's why the government has moved a brigade homeland for anti-riot control.

They see what's coming as soon as people are hungry and figure out the Treasury was looted.

Riots are a ways a way but...I saw info that someone got the names and addresses of the bank execs....and are passing them out....and will post them online if the bonuses are not returned.

This is already looking ugly. :(

Michael
12-22-2008, 11:14 PM
Let me be the first to suggest the old BALLS IN A VICE technique.

sandyd
12-22-2008, 11:26 PM
Michael,

I would bet some are women. Any Suggestions?

:rofl:

CanadaSue
12-22-2008, 11:37 PM
Only way that's going to change is by bank customers voting with their feet. Hear of appalling bonuses, move your business & tell them why. There have to be SOME banks, trust companies, savings & loans or credit unions out there not completely out of touch with reality.

clutterbug
12-23-2008, 09:02 AM
Riots are a ways a way but...I saw info that someone got the names and addresses of the bank execs....and are passing them out....and will post them online if the bonuses are not returned.

This is already looking ugly. :(

Link please. :thumbup1:

Michael
12-23-2008, 11:20 AM
Michael,

I would bet some are women. Any Suggestions?

:rofl:

I guess we have to rule out ovaries in a vice. Doesn't quite work the same way.:re:

sandyd
12-23-2008, 11:43 AM
Link please. :thumbup1:

http://www.tickerforum.org/cgi-ticker/akcs-www?post=76196&page=1

Michael
12-23-2008, 11:47 AM
In the news yesterday: Goldman Sachs in the UK got a 6 billion pound bail out just as it was discovered that they had plans to hand out 7 billion pounds in executive bonuses and pay raises.

There should be no bail outs without total transparency about where the money goes. They need very agressive oversight and accountability.

Darkimbolc
12-23-2008, 12:55 PM
I'm not sure who used to say it, but the best quote to apply to this situation:
Got rope?

Ben Franklin
12-23-2008, 01:37 PM
This year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives ''whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels.'' Goldman spokesman Ed Canaday declined to comment beyond that written report.

The New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.Hmmmm ..... let's see how accurate that "no bonuses" statement is: http://www.lifeaftertheoilcrash.net/PostOilBulletin/GoldmanSachs.html

Ben Franklin
12-23-2008, 09:24 PM
Oh, and here's a piece of an article about facts and figures of the economic debacle in the UK ..... they've been seeing some shenanigans there also:
7. 2.5million
The cost of celebrating Christmas at Britain's nationalised banks. Lloyds TSB, which is accepting about 5.5 billion from taxpayers to shore up its broken balance sheet, is to spend around 2.5 million on Christmas parties for its 100,000 UK employees, or around 25 a head. Meanwhile, HBOS is hosting a "luxury dinner and dance" at the Birmingham NEC for 1,500 mortgage workers, with free hotel rooms thrown in. Meanwhile, Royal Bank of Scotland (RBS) is spending 1 million on parties for its 100,000 staff. RBS also spent more than 300,000 entertaining 40 senior employees and 30 partners recently.
Alex Neil MSP, an SNP member representing central Scotland, reflected the mood north of the border when he said the bank was "playing with fire". He added: "I don't want to be a party pooper, but spending 1m on Christmas parties when so many pensioners have lost their savings as a result of the RBS share collapse is obscene." http://timesbusiness.typepad.com/money_weblog/2008/12/post.html