Banks Sidestep Bonus Caps...
(Whodathunkit?!?)...
Message 25417431
Message #15430 from SliderOnTheBlack at 2/16/2009 3:48:29 PM
re: Chris Dodd & The Stimulus Package...
What did Chris Dodd do?
It's very simple...
He removed the cap on salaries. Geithner's plan imposed
a $500k salary cap. And Dodd removed it.
And it's not just "what" he did, it's "how" he did it.
He snuck his provision in, in the dead of night.
Here's reality...
The public is raising holy hell, and screaming bloody murder about...
"how dare the banksters pay themselves bonuses while they're
writing off billions in losses, and had to have the taxpayer bail them out?"
This anti-bonus mentality isn't going to go away. These banks
are not going to be able to pay top exec's "bonuses" for a
very long time. And with Geithner's $500k salary cap, the banksters
needed a way to get around these limits, and Dodd just gave it
to them...
And drum roll please...
reuters.com
Citi, Morgan Stanley look to sidestep bonus caps
Tue Mar 17, 2009 1:57am EDT
(Reuters) - Anticipating restrictions on bonuses, officials at Citigroup Inc and Morgan Stanley are exploring ways to sidestep tough new federal caps on compensation, the Wall Street Journal said.
Executives at these banks and other financial institutions that received government aid are discussing increasing base salaries for some executives and other top-producing employees the paper said, citing people familiar with the situation.
The discussions are at an early stage, partly because the government has not yet issued specific rules on the bonus payments that will be allowed at companies that received aid under the government's Troubled Asset Relief Program, the paper said.
The report comes on the heels of widespread outrage that insurer AIG, kept alive on a government bailout of up to $180 billion, was paying its employees bonuses of $165 million.
In February, President Barack Obama set a $500,000 annual cap on pay for top executives at companies receiving taxpayer funds.
Citigroup officials have considered designating which 25 executives will be subject to bonus limits, the paper said, citing people familiar with the discussions.
In that scenario, the new rules might not apply to lower-ranking yet still highly lucrative traders and investment bankers, the people told the paper.
"We will comply with the restrictions, in addition to the substantial changes we have already made to our compensation structure," a Citigroup spokeswoman told the paper.
A Citigroup spokesman in Hong Kong declined to comment on the report when contacted by Reuters.
Wall Street compensation has come under intense scrutiny, especially at banks that have received taxpayer money from TARP.
Citigroup has received $45 billion of TARP money. Morgan Stanley has received $10 billion.
Morgan Stanley could not immediately be reached for comment by Reuters.
The bonus forms a large part of salaries of traders and bankers on Wall Street, the paper said.
Wells Fargo & Co, which took $25 billion of capital last year under TARP, disclosed last week that it increased the base salaries of CEO John Stumpf and two other executives, the paper said.
Raising base pay at J.P. Morgan Chase & Co isn't being discussed [yet], the paper said, citing people familiar with the matter.
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I like this bonus plan better...
"The Grassley 'Japanese Model' - Commit Hari Kari, or Resign Plan"
blogs.abcnews.com
GOP Senator: AIG Execs Should Follow Japanese Model -- Suicide or Apology
March 16, 2009 7:55 PM
In an interview with Cedar Rapids, Iowa, radio station WMT-AM today, Sen. Chuck Grassley, R-Iowa, ranking Republican on the Senate Finance Committee, said executives of AIG should consider following what he described of the Japanese model of shamed corporate executives: apology or suicide.
"I don't know whether the ($165 million in bonuses) is an issue as much as just the chutzpah of the people running AIG," Grassley said. "That they could thumb their nose at the taxpayers, it's more that.
"The attitude of these corporate executives and bank executives, and most of them are in New York, that somehow they're not responsible for their company going into the tank," he said.
"I suggest, you know, obviously maybe they ought to be removed, but I would suggest that the first thing that would make me feel a little bit better towards them [is] if they would follow the Japanese example and come before the American people and take that deep bow and say I'm sorry and then either do one of two things: resign or go commit suicide."
Grassley added, "In the case of the Japanese, they usually commit suicide before they make any apology."
Last October, Grassley invoked the Japanese model a little less harshly.
"I’ve suggested it wouldn’t be a bad thing that the leadership of these institutions would take a Japanese-style approach to corporate governance," he said then. "And I’m not talking about going out and committing suicide as some Japanese do in these circumstances, but I am talking about scenes I’ve seen on television where in belly-up corporations the CEOs go before the board of directors, before the public, before the stockholders and bow deeply and apologize for their mismanagement. Something like that happening among Wall Street executives would go a long way toward satisfying my constituents and many Americans that help might be needed and would more gracefully be given by the taxpayers of this county."
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SOTB |
