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Thread: AP study finds $1.6B went to bailed-out bank execs

  1. #1

    AP study finds $1.6B went to bailed-out bank execs

    One man is more important than the entire company.


    [QUOTE]AP study finds $1.6B went to bailed-out bank execs
    By FRANK BASS and RITA BEAMISH, Associated Press Writers Frank Bass And Rita Beamish, Associated Press Writers
    Sun Dec 21, 10:16 am ET

    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.

    Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.

    The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Assets Relief Program (TARP), a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks in a bid to prevent wholesale economic collapse.

    The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes.

    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.

    JPMorgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds.

    Banks cite security to justify personal use of company aircraft for some executives. But Rep. Brad Sherman, D-Calif., questioned that rationale, saying executives visit many locations more vulnerable than the nation's security-conscious commercial air terminals.

    Sherman, a member of the House Financial Services Committee, said pay excesses undermine development of good bank economic policies and promote an escalating pay spiral among competing financial institutions ó something particularly hard to take when banks then ask for rescue money.

    He wants them to come before Congress, like the automakers did, and spell out their spending plans for bailout funds.

    "The tougher we are on the executives that come to Washington, the fewer will come for a bailout," he said.

    ___ [/QUOTE]
    [url]http://news.yahoo.com/s/ap/20081221/ap_on_bi_ge/executive_bailouts[/url]

    On the Net:

    SEC Filings & Forms: [url]http://www.sec.gov[/url]

    Emergency Economic Stabilization Act: [url]http://www.treas.gov/initiatives/eesa/[/url]

  2. #2
    [QUOTE=cr726;2922404]One man is more important than the entire company.



    [url]http://news.yahoo.com/s/ap/20081221/ap_on_bi_ge/executive_bailouts[/url]

    On the Net:

    SEC Filings & Forms: [url]http://www.sec.gov[/url]

    Emergency Economic Stabilization Act: [url]http://www.treas.gov/initiatives/eesa/[/url][/QUOTE]

    Barney Frank a critic? I guess he's also a critic of male prostitution rings being run out of his home.

  3. #3
    Not a fan of Frank, but I guess you would like to ignore what the article is actually about?

    [QUOTE=acepepe;2922487]Barney Frank a critic? I guess he's also a critic of male prostitution rings being run out of his home.[/QUOTE]

  4. #4
    This is why the government needs more centralized power, especially over the economy. They usually make equitable and reasonable decisions!

  5. #5
    Yes, look what a great job the private sector does for our country. We sell to the highest bidder and pretend to make quality products not done by slave labor. Awesome. Gov't is horrible and CEO's deserve to be overpaid for failure.

    [QUOTE=BrooklynBound;2922679]This is why the government needs more centralized power, especially over the economy. They usually make equitable and reasonable decisions![/QUOTE]

  6. #6
    [QUOTE=cr726;2924534]Yes, look what a great job the private sector does for our country. We sell to the highest bidder and pretend to make quality products not done by slave labor. Awesome. Gov't is horrible and CEO's deserve to be overpaid for failure.[/QUOTE]

    Do you think the government deserves more centralized power?

  7. #7
    Centralized because of the bailouts or in general?

    [QUOTE=BrooklynBound;2924818]Do you think the government deserves more centralized power?[/QUOTE]

  8. #8
    [QUOTE=cr726;2925000]Centralized because of the bailouts or in general?[/QUOTE]

    In general, of course. But this bailout is one shining example.

  9. #9
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    [QUOTE=cr726;2922519]Not a fan of Frank, but I guess you would like to ignore what the article is actually about?[/QUOTE]

    Ofcourse he would. Our economy is in the f'n toilet thanks to Bush and the GOP and these republicans all they want to talk about is silly garbage about some guy being gay.

    Hopefully they can continue in their noble quest to defend Christmas.

  10. #10
    [QUOTE=VincenzoTestaverde;2925707]Ofcourse he would. Our economy is in the f'n toilet thanks to Bush and the GOP and these republicans all they want to talk about is silly garbage about some guy being gay.

    Hopefully they can continue in their noble quest to defend Christmas.[/QUOTE]

    Really? It's only on the GOP?

    I remember when I used to think both parties weren't corrupt. It was cute.

  11. #11
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    [QUOTE=BrooklynBound;2925716]Really? It's only on the GOP?

    I remember when I used to think both parties weren't corrupt. It was cute.[/QUOTE]

    It's not even about corruption. The excessive tax cuts for the rich, the Reagonomics bs that sunk our economy in the early 90's did the trick once again. The sub-prime lender crisis certainly accelarated the problem but hey I'm sure whatever chickenhawk you listen to on the radio will tell you different.

  12. #12
    [QUOTE=VincenzoTestaverde;2925722]It's not even about corruption. The excessive tax cuts for the rich, the Reagonomics bs that sunk our economy in the early 90's did the trick once again. The sub-prime lender crisis certainly accelarated the problem but hey I'm sure whatever chickenhawk you listen to on the radio will tell you different.[/QUOTE]

    I'm a chickenhawk? Don't do this, Vincenzo. Know who you're quoting. You're better than that!

  13. #13
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    Oh my! Of course this is A-OK All right! The banks exec's aren't union...so if they are responsible for running a sh*tty company...GIVE THEM MILLIONS OF DOLLARS!

    I mean WTF!! The audacity of these peon auto workers wanting to have a retirement planned and sh*t. What a bunch of stupid f*cking morons. They don't wear suits to their jobs. Who the f*ck do they think they are?? Special or something??

  14. #14
    I did notice BB has yet to comment on the actual article. :P

    [QUOTE=PlumberKhan;2925857]Oh my! Of course this is A-OK All right! The banks exec's aren't union...so if they are responsible for running a sh*tty company...GIVE THEM MILLIONS OF DOLLARS!

    I mean WTF!! The audacity of these peon auto workers wanting to have a retirement planned and sh*t. What a bunch of stupid f*cking morons. They don't wear suits to their jobs. Who the f*ck do they think they are?? Special or something??[/QUOTE]

  15. #15
    [QUOTE=cr726;2925945]I did notice BB has yet to comment on the actual article. :P[/QUOTE]

    What do you want me to say? The sky is blue? What did you think my opinion was going to be?

    Itís a gross abuse of power and shows why the Fed doesnít deserve as much as they do, much less more.

  16. #16
    [QUOTE=cr726;2924534]Yes, look what a great job the private sector does for our country. We sell to the highest bidder and pretend to make quality products not done by slave labor. Awesome. Gov't is horrible and CEO's deserve to be overpaid for failure.[/QUOTE]

    With respect, the market has an answer for such failure....it's called bankruptcy and going out of business.

    The Govt. is compounding these private sector failings, by bailing out poorly run companies. Quality run companies are made to suffer because their poorly run competitors are being socialized/subsidized by our Govt., both Bush and the Democrats. As usual, this removes incentive to run your company wisely, and instead rewards failure (as do so many supposed good-for-us socialization/subsidization plans do).

    Feel free to be pissed about what the article contains, but remember....it is your party (the democrats) and Bush, hand in hand, running to reward these failed companies for their failure.

    As for Slave Labor.....can you elaborate, I am unaware of what you might mean with that in modern America.

  17. #17
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    [QUOTE=Warfish;2926377]With respect, the market has an answer for such failure....it's called bankruptcy and going out of business.
    [/QUOTE]

    Sorry. Bankruptcy is only an option for businesses NOT on Wall Street.

    Bail, baby, Bail.

  18. #18
    [QUOTE=PlumberKhan;2926466]Bail, baby, Bail.[/QUOTE]

    Says Democrats and President Bush.

    I do not agree with either of them.

    What else do you want me to say? I havn't supported these bailouts from the get go. /shrug

  19. #19
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    +1

    This is the biggest example why neither Obama nor McCain actually represents change.

  20. #20
    [QUOTE=cr726;2922404]One man is more important than the entire company.



    [url]http://news.yahoo.com/s/ap/20081221/ap_on_bi_ge/executive_bailouts[/url]

    On the Net:

    SEC Filings & Forms: [url]http://www.sec.gov[/url]

    Emergency Economic Stabilization Act: [url]http://www.treas.gov/initiatives/eesa/[/url][/QUOTE]

    If this is how to get rewarded, teacher's unions really oughtto give up tenure and shoot for merit pay.

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