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

[HCT]

Shouldn't these people be in Orange Jumpsuits???


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
2 hrs 22 mins ago

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 0ysis 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 — 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.

 

[Caneyscud]

Took me a few rewrites - or this would have been a very large post - but it is down to this - If our darling Barney Frank knew/knows about this why doesn't he do something about it?  I guess those "hard hitting" modern journalists just missed that opportunity - wait but....

Such a simple concept - such a simple question!

[bflosmoke]

Man imagine how much brisket you could buy with that kind of money!
Seriously though dont it make you want to puke. Us little guys never get ahead, we live in a system where the haves get special treatment. And the average Joe gets the shaft.
BFLO

[smokeitall]

Not quite sure how these guys sleep at night....

[Smoking Duck]

I'm sure they sleep well........if you've been doing it as long as these guys, the conscience is the first to go.  However, when you realize the Yankees just signed 4 baseball players for $425 million, does anything else really make sense?  Things have gotten so out of whack, it's no wonder the economy is failing.

[HCT]

SD, my brother just told me last night that the yankees signed a player on for $180 million. My question is when are the fans gonna say "enough is enough"?

[smokeitall]

However, when you realize the Yankees just signed 4 baseball players for $425 million, does anything else really make sense? 

I agree....but at least the bailout didn't go to the sports teams....it went to the very greedy!!!

And I still don't understand how a single player is worth 180 million, I guess thats why the average Joe can only go to a baseball game once a year and has to save to go.

[HCT]

Smoke, I hear the Mets and Yankees are now looking for money also. 2 new stadiums plus the cost of the players.

[Smoking Duck]

It sure does make you go hmmmmmmmmmmm.......I'd have rather seen the bailout money go to each household.  That would have helped out the little people and the local communities.  I was reading something the other day that said when $1 is spent at a big chain store, .14 cents stays in the local community.  When spending a $1 at a locally-owned store, .45 cents stays within the community.  Main Street USA would be doing a lot better these days if the local folks could have distributed the bailout money versus the government.  When all is said and done, I'd bet we'd be shocked to see what percentage of the entire bailout money actually went overseas.

As far as the Yankees go, they've turned me off of baseball a bit.  There's no way the small city teams can compete......course, having a bunch of talent doesn't guarantee a great team (see 2008 Dallas Cowboys) but it sure would be nice for every team to have an opportunity to compete.  As it stands now, teams like Pittsburgh will be fielding minor-league teams in comparison to the Yanks, Red Sox, etc.  Perhaps a salary cap is in order.  Heck, I think the luxury tax that the Yankees are paying for signing that many big deals is more than the Pirates payroll.