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
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(CBS/AP)
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Timeline Stopgap Measures A look at the series of government moves to try and stem the financial meltdown.
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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.
Add a Comment See all 345 Comments
- chaos, utter chaos as we run around like chickens being chased by a fox.
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- I agree that the corporate exec salaries and bonuses are a kind of larceny, and should be publicized and prosecuted. But why is it that no news agency tends to report on the salaries of the network news anchors? Couric, Gibson, Williams and all the rest are paid millions for basically reading text on camera. That money comes from the sponsors of course, who sell their goods and services to the public, who as always, bears the final cost. We are all a kind of ''stock holder'' when it comes to paying for these peoples limos, wardrobes and haircuts. Every time we purchase drugs or toothpaste or toilet paper, we are all required to contribute. Are they worth it?
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- Americanism Economics is the responsibility to provide protections to United States of America economical system; which benefits all the citizens fairly and with patriotic justice.
http://ameriborn.com/ - Reply to this comment
- Run a search on "corrupt federal reserve" some very intresting and informative sites.
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- Your tax dollars at work. Congrats to all of the voters who put these clowns in office that decided to steal tax money out of the pockets of the people and give it away to the banks.
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- Its time to move to another country. *** America and all its worth.
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- "why isnt there any investigation into whos responsible for these bad loans why are we paying for incompedence. oh becuase our politicians are incompedent so this is what we deserve cause we americans voted in this incompedence of corse we dont get much of a choice obama or mccain some choice"
Speaking of "incompedence," you need to go back to elementary school. - Reply to this comment
- The title of the article is "$1.6B Of Bank Bailout Went To Execs" and then in the first paragraph it says "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."
So tell me how the bailout funds that were approved this year were used to pay top executives last year. - Reply to this comment
- You know what will take this clowns to pay attention is to see what a 45 caliber bullet does to the body when it rips into the soft tissue of the chest. Just 2" from the left side of the chest is all it takes. We are not going to take this SH*T anymore. Their days of Wine & Roses in the banking world is done for. Say good night Gracie
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- i am laid off and struggling and these overpaid execs our getting bonuses paid for with tax payer money. Are''t we in this mess because of their deceptive practices and greed. good grief. This bunch of people are the last people in this country that deserve a bonus. This is outright theft.
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- why isnt there any investigation into whos responsible for these bad loans why are we paying for incompedence. oh becuase our politicians are incompedent so this is what we deserve cause we americans voted in this incompedence of corse we dont get much of a choice obama or mccain some choice
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- Everyone who has funds in these particular banks need to rush and take out every last penny and let the damned banks fail or let those who benefited from the bailout with bonuses etc. save the damned things. This is beyond disgusting the rich getting the benefits of the hard-working taxpayers.
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- Now you know why I was on the corner dressed up like D. Cheney thanking the suckers (my fellow Americans) for all the free money. Let''s all join Billionaires for Bush, why not. The billionnires need EVEN MORE, then they can have even more money for war. Ha Ha Ha Ha Ha!!!!!!!!
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- Did you see the name, Richard D. Fairbank!! I bet he has laughed himself, along with his boyfriend Nigel Morris, sick over that being his last name.
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- I''m telling you all they will only stop when we start to make them suffer. Take away all these scumbag rich people... PUT THEM IN PLACES LIKE CORCORAN, MaCALESTER, AND ESPECIALLY ATTICA. Yes these are the nation''s finest places of lodging for those punks who are really responsible for the equivalent of treason.
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- Typical of the Bush administration...rich get richer and the poor get poorer. How do those rich *** sleep at night? Oh right, in their big cozy mansions with pillows fluffy with American common people $$$.
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- I have heard of several of my friends,whom had fairly good credit that have now been turned down for loans. I think that the US Government needs to make them pay that back. This was not suppose to be a blank checque deal.
All corporate jets need to be sold and full accountablity needs to happen. Please write you Congress - Reply to this comment
- The problem is that while we still have something left the corporations didn''t get is when we still have leverage to fight them. If we let them completely ruin the middle class, we will be COMPLETELY dependent on them. We won''t be able to do effective boycotts and general strikes.
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- and try to come out on the other end of this with at least minimal damage.
Posted by DebinOK1
rephrase:
And try to come out on the other end of this with the least possible damage. - Reply to this comment
- I would love to hear some ideas about what we should do about it. I have mine but everyone I know thinks they are too radical. They would rather be turned into slaves by their corporate masters.
Posted by noloyalisti
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Convincing the masses is impossible, they wont listen until its to late. All we can do is go off grid asap, be prepared to survive, and try to come out on the other end of this with at least minimal damage. - Reply to this comment
The road ahead in Afghanistan, and the crucial decision Obama faces.
