TARP Recipients and their Bonuses
These are really three different issues: 1) The CEO compensation; 2) Commission/P&L bonuses of profitable employees; 3) Misaligned compensation packages of the CDO/mortgage-backed buying managers.
The first one is a symbolic issue (and is irrelevant IMO) and the second one is perfectly appropriate — its the 3rd one that has become so problematic.
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2007senior-officer bonuses*/ total bonus pools**
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Bailout money
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2008
Bonus Pools |
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Merrill Lynch
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$85M/$9.5B
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$10B
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Reportedly, in December, just before Bank of America took over, John Thain quietly awarded $3 to $4 billion in bonuses, a month earlier than was customary.
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Bank of America
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$36M/$11.3B
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$15B
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The company granted 2008 retention bonuses to 6,200 Merrill brokers, and C.E.O. Ken Lewis declined to answer a question about this year’s bonuses at a shareholder meeting in December.
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Goldman Sachs
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$313M/$12.1B
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$10B
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Average compensation is reportedly down 45 percent in 2008 but will actually be a greater share of revenues than in 2007.
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Morgan Stanley
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$64M/$9.9B
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$10B
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The firm’s 2008 bonus pool is down 50 percent but is still estimated at $5 billion.
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Citigroup
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$54M/$20.7B
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$45B
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The ratio of compensation to revenues is reportedly not remarkably different for 2008.
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Wells Fargo
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$40M/$8B
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$25B
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C.E.O. John Stumpf and top executives have not said they will forgo their 2008 bonuses as of mid-January.
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J. P. Morgan Chase
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$91M/$13.6B
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$25B
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While net income was down 64 percent in 2008, bonuses are reported to be down only 30 to 50 percent.
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Total
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$683M/$85.1B
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$140B
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*Total of top five bonus packages (including stocks) received by highest-ranking officers.
**Estimated as 60 percent of compensation where exact figures are not available. |
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Source:
Bonus Babies: The Big Tarp Recipients and their Booty
Christopher Bateman
Vanity Fair, February 2, 2009, 10:00 AM
http://www.vanityfair.com/online/politics/2009/02/bonus-babies-the-big-tarp-recipients-and-their-booty.html
Wall Street’s $18.4 Billion Bonus
Michael Shnayerson
Vanity Fair, March 2009
http://www.vanityfair.com/politics/features/2009/03/wall-street-bonuses200903
February 5th, 2009 at 2:22 pm
Awesome graphic. Perhaps some comparison should be made to bailout money received by the autos and Main Street (this one should be easy since I believe the number was/is $0).
February 5th, 2009 at 2:32 pm
The USSRA (United Socialist State Republic of America) is indeed alive and well in America; but this is socialism for the rich, the well connected and esp. Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer.
98% of Americans had better get a new dream and fast !
February 5th, 2009 at 2:40 pm
I guess you could look at this and conclude that TARP has done nothing more than ensure bonuses were paid regardless of company performance.
That’s not what Paulson told us it was for though was it?
Then again, the bonus money came from a different pool.
February 5th, 2009 at 2:42 pm
I’m glad my taxes are used efficiently. It must be tough when compensation is down by 50%.
February 5th, 2009 at 2:43 pm
Talk about entitlement programs. I wonder how the Wall Street entitlement program compares on a per capita basis against other social entitlement programs.
February 5th, 2009 at 2:46 pm
I have not seen yet, in any article or discussion about bank bailouts, govt insurance, or bad bank formation, the acknowledgment that the housing bubble WAS INDEED a bubble. Yes, people do still purchase tulip bulbs, but who would argue that eventually tulips will reach the peak valuations they reached at the top of the tulip mania bubble? If the Dutch govt had stepped in and purchased tulip bulbs at 50% of their peak value, or insured the dealers against further losses…how would that have worked out? Do you think that tulip bulbs would have recovered their valuations even thirty years later?
Tulips are different from houses in that people can live without tulips. However the speculative dynamics are the same. When people are financing and purchasing of a commodity SIMPLY BECAUSE IT IS GOING UP IN PRICE, the speculative dynamic is in place. The most similar case in recent history is the electricity bubble engineered by Enron, with the help of the government officials responsible for regulating that market. People need electricity. Does anyone think electricity will reach the bubble prices it reached in California?
Pretending that housing valuations (or oil, tulips or any other bubble) were driven by underlying demand rather than speculation driven by those who exploited loopholes in the financial system is…worse than useless. It’s criminal. Trying to artificially drive demand to that level again is despicable.
For those who argue otherwise, a viewing of “Enron: The Smartest Guys in the Room (2005)” will be highly instructive. Precisely the same events happened less than 10 years ago. The same crew of politicians and regulators that brought us Enron have brought us the MBS fiasco.
What Obama needs around him are not the smartest guys in the room, but the most ethical, compassionate guys in the room. Meaning: those who have the well being of the nation as a whole in mind.
Unfortunately, the current cadre does not meet that standard. They came from, and are enabling, the every folks that created and profited from the bubble.
February 5th, 2009 at 2:55 pm
Am I reading this correctly?
Hope not: $85.1B in bonuses out of the $140B donations?
February 5th, 2009 at 3:03 pm
Total Bonus $85.1B & associated Bailout: $140B
Uncle Stupid strikes again. I bet he even thinks he got a good deal out of it.
February 5th, 2009 at 3:06 pm
Take a poll: Is Uncle Stupid represented by thieves, morons, or morons working for thieves?
I think I’ll start drinking earlier today.
February 5th, 2009 at 3:22 pm
So if Obama uses the second 1/2 of TARP and pays cash for trash and allows banks to omit recording losses on the sales, why does he think they will do something productive with the cash they get? They have a track records of either stealing it or burying it. Little appears to be going for anything that will stimulate the economy. Uncle Stupid, meet the new and proven Uncle Stupid.
February 5th, 2009 at 3:23 pm
Of course all the idiots who post on blogs (like me) pointed out when TARP was being debated that this was simply looting Main Street to pay pals on Wall Street. Congress piously insisted that the future of the Republic was at stake and got stampeded into voting for it.
Only two conclusions are possible: they are gullible or they are dishonest. Well… three conclusions: they could be both.
February 5th, 2009 at 3:27 pm
Congressional Oversight Panel reported to the Senate today that Treasury overpaid for bank assets in the amount of $78B in TARP I. Allowing for rounding errors and estimations, $78B vs $85B seems close enough for government work.
February 5th, 2009 at 3:31 pm
I think they’re both, wally. I may have to break out the vodka early today as well.
February 5th, 2009 at 3:48 pm
Really glad we used public money to make sure the bankers got paid this year! They were so good to accept only $85 billion in bonuses, much less than they got last year. Maybe those of us who think the bankers aren’t getting enough tax money can start an “adopt a banker” program and sign over our paychecks directly to deserving bankers.
Of course, it’ll take about 10 wage-earners per banker to get them to the bonus level they’re accustomed to. Who else is in?
February 5th, 2009 at 3:53 pm
We’ve gone from not-negotiating-drug-companies-on-price to limiting-executive-pay. Any moderates out there?
At least the people who hate a maximum wage are the same people who hate a minimum wage? …Except when they want 4% mortgages for homeowners:
http://uk.reuters.com/article/economyNews/idUKTRE5115UL20090202
And if we’re going to claw back salaries, let’s claw back salaries from the lobbyists who stuck us that “Prescription Drug Benefit.” Is there anybody’ who’s against lobbyist clawbacks?
February 5th, 2009 at 3:57 pm
I’ve got a bonus for all of them: prison time at hard labor.
February 5th, 2009 at 4:01 pm
We are the morons. We need to collectively refuse to pay taxes. We need to hunt down every banker, politician, mortgage broker….
February 5th, 2009 at 4:12 pm
When we talk about taxpayer money, why don’t we count all the money put into 401k’s that’s been vaporized too. Millions of Americans have watched their life’s savings vanish, and MSM wants us to worry that smart people leaving Wall Street firms?…………….to go where?
Pay them all in their own common stock and make them hold it for two years. We’ll let them borrow to survive and we’ll balance out at the end. How’s that sound?
February 5th, 2009 at 4:27 pm
Can we start putting some of these “Preference by Loreal” (I’m worth it) girls on TV?
February 5th, 2009 at 4:44 pm
Sure is a good thing that money isn’t fungible.
Besides, as long as no CEO is going to make more than $500K going forward, I say, let’s just go ahead and borrow $3 trillion to give to the bankers.
After all, Obama says we need “bold” action.
February 5th, 2009 at 5:00 pm
It all makes sense to me, it’s just redistribution of wealth.
Pretty soon we will have a new 1040:
Step 1: How much money did you make last year?
Step 2: Send it ALL to a 26 year old associate at Goldman Sachs who had a BUY rating on Bear Stearns.
Step 3: Don’t forget to pay the postage.
February 5th, 2009 at 5:02 pm
Barry,
I would love to see this alongside their respective political contributions!
February 5th, 2009 at 6:43 pm
Ever wonder why the pols are so concerned with the health of the financial industry? Here’s part of the answer:
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TARP Recipients Paid Out $114 Million for Politicking Last Year
Published by Communications on February 4, 2009 9:52 AM
The companies that have been awarded taxpayers’ money from Congress’s bailout bill spent $77 million on lobbying and $37 million on federal campaign contributions, Center finds. The return on investment: 258,449 percent.
http://www.opensecrets.org/news/2009/02/tarp-recipients-paid-out-114-m.html