Bailed Out Bank Executives Got $1.6 Billion
A study by the Associated Press says that executives at bailed out banks got $1.6 billion in salaries, bonuses, and other benefits — including cars, personal use of company jets, and country club memberships.
The total amount given to nearly 600 banking executives would have covered bailout costs for many of the banks that accepted funds from the government, says the AP.
The article is a laundry list of perks and multi-million dollar bonuses. Here are a few examples we really enjoyed:
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.
...
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.
And there's more!
Top execs got $1.6B of taxpayer bank bailout, report shows [AZ Star]
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Gee, apparently they just didn't get enough perks, and must have been too busy worrying about how they were going to pay their bills and other things to focus on their jobs. I propose we double it next year.
I love how this article is right above the post about an infulx of shoplifting because people can't afford their basic household supplies at Wal-Mart...
What a case of bullshit and we are still not being told where all the money went. I particularly like Goldman Sachs explaining that the executives needed more time to focus on their jobs. If that's what paying attention to your job does than STOP!
I'm sure some of that money will eventually trickle down to us peasants to buy some bread to go with our stolen ketchup packet tomato soup. Have faith.
I still like the idea that for the auto bailout, every househould should get a free overstock vehichle from one of the big three (like a subcompact, Chevy Aveo or something). That way we feel like we are getting something back, they move stock, and end up generating profit on the mantinence. Of course that would never happen, that's like the idea of the bank bailout resulting in people's mortgages being forgiven.
We give the money, but don't get anything back. Like bad first date.
*disclaimer - i'm not saying these people aren't dumbasses*
Now I understand that these people may have made some bad decisions, but I still don't get why people complain about CEO salaries. If they are paid that much it is because the company board decides they are worth that much.
Look at a company like Merril Lynch. In 2007 they lost 7.8 billion dollars. Now blame or reasons for this aside if a smart CEO can cut losses by .1% thats 78 million dollars he saved the company.
If you look at it this way you can see why these companies will pay these top people to run their companies, it can be a good investment for the board of directors.
I also love how Citigroup got a bailout to free up credit, and they respond by doubling people's interest rates immediately.
Also funny how they act like these morons are some kind of demi-gods floating in brain space figuring out complex calculations or something. "They must be driven everywhere in a special pod, in order to maximize their "brain algorythms". PUHLEASE. These guys aren't any smarter than your average college grad, just do a GREAT job of bamboozling people.
"Wah-hey! I have a revelation! I have awoken from my deep sleep to bring you these instructions from beyond: to combat our falling sales, we will fire all of our experienced salesmen, bring in temps and new-hires, cut wages and benefits, and watch sales skyrocket!"
"All hail the master planner!"
@aftercancer: To be fair, Goldman made money off the counterparty postions from securitized mortgages and only recently went into the red due to the market, not their own actions.
And yeah, they took bailout money - the problem with bailouts is that it puts those that don't take the money into a competitive disadvantage against their rivals who do. So it would have been stupid not to. But that money didn't exactly "save" Goldman.
Over 200k to commute from Chicaco to NY, why can't these executives uproot their precious family, just like normal people do, or, I don't know, don't take the job??
and you wonder why communism is making a comeback.
so the Bush administration has gone from "no-bid" contracting to "just giving" their friend's cash...after they let the competition fail, of course. No one referenced here is a dumbass, they most likely know what they are doing and had this planned all along.
The United States of America is dead.
@cristiana: Always wondered that myself. My dad did the commute thing for about 18 months once (airlines, in coach, every other weekend) because the company needed his expertise and he didn't want to take my brother and me out of school (aged 12 and 8) and move us out of state. We ultimately did, though.
But I'm hard-pressed to believe in an industry like this that they JUST CAN'T find anyone else in NYC who can do the job locally and for less money...
of the three mentioned, Merrill Lynch is the only one that was really run into the gutter, and it was basically on his predecessor's watch. i'm not defending their pay, it's excessive, but Goldman just posted it's first ever quarterly loss in a horrible market,so you could argue the CEO's done a good job. You could argue Dimon's done a good job as well. the CEO's people should be grumbling about are at countrywide, wachovia, wash mutual, etc
@dtmoore:
The bitch of this situation though is that in some cases (not all), that board is appointed by the person that they pay.
Like I've said quite a few times, they didn't care about what these fools did with their money (even though they are in the BUSINESS of money, and could not RUN THEIR BUSINESS...you'd think they would have wanted a thorough action plan and restrictions on this crap like they demanded of the auto industry (who they STILL turned down in the end!)
@dtmoore: The point is that they don't need to be getting paid that much with MY money. If the board wants to pay the CEOs this way with their OWN profits, well more power to them. But when they have failed miserably and are begging for help, they should be keeping their business running at the bare bones level, not lavishing their clearly unqualified execs with luxuries and perks.
Henry Paulison had this planned all along. Lehman failed for a reason...because Goldman Sach's ex-CEO is driving the bus and can kill the competition from the executive branch.
Matthew 19:23-24
@dtmoore: I'm sure most people would agree that the CEOs deserve a fair salary. I think what irks people is that they don't just get a fair salary, they get clever tax avoiding pay in the form of bonuses and options which seem to far exceed their actual salary by an order of magnitude or two. Not to mention people are generally confused why a CEO deserves a bonus when the company has failed under their leadership. I know I don't get any performance related pay if I don't perform.
@sir_eccles: If you own a company and let a bunch of your friends decide how much you should be paid, do you really think you'd get a bad deal?
Boards of Directors are a big part of the problem.
Welcome to the new plutocracy, same as the old plutocracy.
Okay $1.6B out of $700B is only about 0.2%. In the scheme of things, not too big of a deal.
But still, it really sucks. When you decide to not use a credit card because you're tired of paying these fat-cats fees, the government takes your money anyway and gives it to them.
@SacraBos:
I'm not really sure why they deserve one penny of my tax dollars as restitution, quite honestly.
@ilovemom:
. . .and the flashlight I'll have to strap to the front of the car to stand in for the burnt-out headlight I can't afford to replace.
How is this news? I thought everyone already knew that executives are very well compensated, sometimes unrightly so such as when they take a perfectly good company and send it careening to the ground with their bad decisions.
More importantly, these figures are mostly, if not all, from last year. The Banking Industry was still in denial about how bad things were. Everyone was saying "things will be better soon." Of course everyone knows now what they should have been doing with some of the money they gave the executives, but hindsight is 20/20.
2008 is probably going to look scandalous as well since everyone still seemed in denial until their compadres started falling one by one; that's when the screaming started. I think 2009 will be the year we really get to see the impact that the bailout has had on America's companies.
@ravensfire: Do you really think the banking industry was in denial? Or they were TELLING everyone they were?
I just don't believe that people who make their living in the banking industry didn't believe this was all going to happen.
Seems like it was more, "shit I better take as much as I can before the bottom falls out!" than "whoops the economy tanked, who saw that coming?!"
@dtmoore: news flash: they really aren't worth that much. the explosion in executive compensation has largely been due to the massive hauls by fund managers. how can JPM or BAC pay their executive ONLY a few million when a simple fund manager is making $25-30 million?
c'mon, seriously. 1 person worth the salary of 500, 1000, 10,000 average workers within a company? that's ludicrous.
well, hopefully everything will fix itself. obviously fund managers aren't raking in the dough these days & it's doubtful that the easy money will return there. & now these packages are exposed for what they really are - bullshit. a huge, smelly pile of bullshit.
"...Okay $1.6B out of $700B is only about 0.2%. In the scheme of things, not too big of a deal..."
Yeah, you are correct, and:
$16M out of $700B is only about 0.002%. In the scheme of things, this is really REALLY nothing, so why not PAY me this $16M??
@cristiana: Lots of "Normal People" work one place while their families live another. I know several people that do that. They have to go where the work is but they don't want to interrupt their families life: kid's schools, friends etc., proximity to extended family, or maybe their families quality of life would drastically decrease near work due to a higher cost of living. So they have a place to stay near work and commute home every weekend. The difference between these people and CEOs is they either commute by driving or fly on commercial airlines.
@dragonfire81: Its a circle jerk (not the band, for you old school punks). CEO's serve on the boards of other companies and approve whatever outrageous salaries they ask for because they get the same treatment in kind. So, even creating a wall between the CEO and the board creates the same results. I say we tax the hell out of any heavy duty salaries/bonuses (cause they won't get lowered) and at least give us peasants schools, better transporatation infrastructure, health care, something.
@ravensfire:
Yeah, I omitted a few key things in my rant. My key point was that the guy commuted on a private jet, and I assume he did it most every day. I wasn't trying to knock the real people who do live one place and have their family stay in another.
@sega8800:
Ostensibly to lend the money? TARP's purpose is to stimulate lending - it's not some banking welfare program. That's why the consistent characterization of a "bailout" is so laughable.
If it is a public company we should be able to pass laws that tie exec pay to profits or the one I like the lowest paid employee. Lets see which elected crooks will get off the tit and do something good for America and not their reelection fund.
Is it too late to become a highly-paid bank exec? Because I'm totally free for the next few weeks...
@TechnoDestructo: Or feed their children and clothe them and put gas in their car so they can get to work, right?
@AlteredBeast: I think more people would die from driving these sub-par cars then you would like to realize.
@Rob Weddle: that's it? no catchy "2.0" at the end? no expensive firework show nor multi-million dollar ad campaign using geeks & hipsters to create some sort of non-existent metaphor?
man. what a let down.
@hustler: Nah, we just got the USSA from the old administration instead of from the one coming in January like everyone wanted us to believe.
@dtmoore: I'm pretty sure that your math is off on that one:
.1% x 7.8 billion = 7.8 million NOT 78 million
If you don't like this, there's a solution in a couple years. Do yourself a favor and vote against any representative or senator who voted in favor of this boondoggle.
@ADismalScience: Yeah, look how that turned out. TARP's intent may have been to stimulate lending, but they did a shitty job of crossing their Ts and dotting their Is and now the banks are using it to buy up other banks. It's a bailout.
@ilovemom: The bad part is that my family has seriously cut back from the frivolous lifestyle we once had. I had to switch back to the full sodium Campbells soup. We also cut 1 can of soup with cans of water, down from the two cans of water we used to be able to afford.
Next week I plan on fighting the birds for their bread in the park.
@AlteredBeast: I agree. At least let me cop a feel. If I am getting the shaft, let me die a happy man!
@ARP: maybe not the band, but i'm sure at least one of their songs is appropriate:
do you feel strange?
walking down the street
this might be your unfortunate day
not proud of your past
you burned a few
now you're cooking
in your own stew
Well, to be fair to the folks at JP Morgan Chase, they didn't need the emergency cash infusion. Everybody was getting a handout, and the company took one. For navigating that company and coming out the way the bank did, he certainly deserves some bonuses.