WASHINGTON, Dec. 21, 2008
$1.6B Of Bank Bailout Went To Execs
AP: Money Given To Struggling Banks Went Toward Bonuses, Stock Options, Country Club Memberships
-
Photo
(CBS/AP)
-
Timeline
Stopgap Measures
A look at the series of government moves to try and stem the financial meltdown.
-
Timeline
Financial Meltdown
Track major events that lead to one of the most tumultuous times in Wall Street's history.
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:
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.
Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28.
Your Tax Dollars At Work: Chauffeurs, Club Dues
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, a California Democrat, questioned that rationale, saying executives visit many locations more vulnerable than the security-conscious U.S. 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.
By Associated Press Writers Frank Bass and Rita Beamish
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Video and Galleries from Business
-
Video
Airports Land Stimulus Money
-
Video
Eating-In Replaces Eating-Out
-
Video
Vacation Visa
- 1
- 2
- 3
- 4
...
- 7
- next
See all 350 CommentsI LUV IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I guess this was Bush''s last chance to screw the American taxpayer on behalf of the rich.
Posted by renonv5 at 04:16 PM : Dec 21, 2008
$50 billion compared to $1.6 billion is a massive fraud. What planet did you just arrive from?
There''s no room...we''ve been changing law since 1980 to incarcerate people for things like marijuana possesion while at the same time allowing private companies owned by the friends of the politicians of a certain political party (the one that begins with the letter R)to build taxpayer funded jails and prisons to keep the petty criminals in. Just another way that the cronies of Reagan and Bush thought up to separate the US taxpayers from their money.
This is just more trickle down economics.
But the only thing that ever trickles down are losses.
**********
You bush boot lickers are even more appalling. Run along now, you have some boots to lick.
This is only what has been reported so far. Don''t tell me you believe that this is it or I will have to ask you what planet you are from, as if it would make a difference.
I though Bush vowed to "Never negotiate with terrorists''.
And look at the reward for the bailout money...NOTHING!
Pay to the execs is just a cover story for what really is the story and that''s all of the ''prime share-holders'' and ''bond holders'' that are own by a so-called ''elite'' cartel of oligarchial families have looted trillions from the tax payer.
That''s what''s so astounding!
Half of the $3 trillion that we spent in Iraq went to Halliburton and Bush''s cronies in no-bid contracts.
**********
You bush boot lickers are even more appalling. Run along now, you have some boots to lick.
--------------------------------------------------------------------------------
Posted by rudy6543
Haha, I knew I would get somebody! You didn''t even read the rest of my post. But honestly I probably wouuldn''t either after that. But I''ll post the rest of what I said so you can have the punchline. -----------------------------------------------------------
Yeah, just blame everything on Bush, that''s all you liberals know how to do. Just because Bush is supposedly the most powerful man in America... the president for the last 8 years... because he started a war based on a lie that costs you silly tax payers billions every month... just because he presided over the single largest financial rapeing of the American people ever... pfft! Get real! Bush is blameless. Besides how many U.S presidents can dodge shoes better than him? ''Nuff said.
Sorry! I didn''t read the rest of your post. That''s a lesson to me. Well put.
--------------------------------------------------------------------------------
Posted by rudy6543 at 05:04 PM : Dec 21, 2008--
That''s because junkyard dogs like Sean Hannity and Rush Limbaugh don''t want the best for America only what''s best for their multi-millions in radio contracts.
They need to be shut down and take responsibility for the Bush/Hannity/Limbaugh-Depression that''s unfolding.
You can argue about what Bush did this or that or what Clinton did but it won''t repay a penny of what the banks wasted nor send a signal to those in Washington to hold their feet to the fire for doing it.
Naturally, the laziness and stupidity of the Great Emperor Bush II and his financial "team" of Hank "Old Baldy" Paulson, and Ben "Fuzzy Face" Bernanke had a lot to do with that as well!
Be that is it is, all neocon Fascist Nazi Republicans are overjoyed that their tax money and the tax money of all their children, grandchildren, and great-grandchildren haS gone to enrich the already obscenely rich corporate banking executives.
They are also excited that Hank "Old Baldy" Paulson has demanded that Congress release the remaining $350 Billion as the BIG Banks are demanding more TARP money before Obama takes office and uses it the create jobs for the almost-gone middle class, and repair the country''s infrastructure.
The Corporate Banking executives already have plans to "use" that money: FOR THEMSELVES!!!
SIG HEIL, GREED IS GOOD!!!, BUSH!!!
--------------------------------------------------------------------------------
Posted by longtree at 05:35 PM : Dec 21, 2008
I understand and agree. Well said.
As long as the Bu$h Regime is in power, greed reigns supreme. If you expect anything otherwise, you are an idiot.
- 1
- 2
- 3
- 4
...
- 7
- next
See all 350 Comments