Yes, thank you!! It's the right thing to do. . . .

[Bird of Prey]

U.S. to Order Steep Pay Cuts at Firms That Got Most Aid

WASHINGTON — Responding to the growing furor over the paychecks of executives at companies that received billions of dollars in federal bailouts, the Obama administration will order the companies that received the most aid to deeply slash the compensation to their highest paid executives, an official involved in the decision said on Wednesday.

(javascript:pop_me_up2('http://www.nytimes.com/imagepages/2009/10/21/business/22feinberg-ready.html', '22feinberg_ready', 'width=465,height=492,scrollbars=yes,toolbars=no,r esizable=yes'))
(javascript:pop_me_up2('http://www.nytimes.com/imagepages/2009/10/21/business/22feinberg-ready.html', '22feinberg_ready', 'width=465,height=492,scrollbars=yes,toolbars=no,r esizable=yes'))Under the plan, which will be announced in the next few days by the Treasury Department (http://topics.nytimes.com/top/reference/timestopics/organizations/t/treasury_department/index.html?inline=nyt-org), the seven companies that received the most assistance will have to cut the cash payouts to their 25 best-paid executives by an average of about 90 percent from last year. For many of the executives, the cash they would have received will be replaced by stock that they will be restricted from selling immediately.


And for all executives the total compensation, which includes bonuses, will drop, on average, by about 50 percent. . . .
http://www.nytimes.com/2009/10/22/business/22pay.html?_r=1&partner=rss&emc=rss&src=igw

It's too bad these greedy jerks wouldn't do it on their own. . . .

[robeiae]

I feel so funky...

[MattW]

U.S. to Order Steep Pay Cuts at Firms That Got Most Aid

I gotta agree. They took the money, they should have expected strings.

But who is to say these companies will do anything productive with the excess funds? Maybe keep lower paid employees on the job...

If shareholders actually held boards and executives responsible for poor performance, and didn't allow huge bonus payments and lavish perks in the worst layoff years, I'd think it would be as good as we could get to the private sector to moderate itself.

[backslashbaby]

I gotta agree. They took the money, they should have expected strings.

But who is to say these companies will do anything productive with the excess funds? Maybe keep lower paid employees on the job...

If shareholders actually held boards and executives responsible for poor performance, and didn't allow huge bonus payments and lavish perks in the worst layoff years, I'd think it would be as good as we could get to the private sector to moderate itself.

It'd be much better!

There's the socialism/communism argument against the gov't calling the shots here, but I have to say, Then don't suck so bad at capitalism!!

[MattW]

It'd be much better!

There's the socialism/communism argument against the gov't calling the shots here, but I have to say, Then don't suck so bad at capitalism!!
Well, that really is the role shareholders - to make sure the company is run effectively and efficiently and not destructive to itself or the community we all live in (a global one). Since so much of the ownership is concentrated in so few fund managers hands, and they have allowed companies to be run by a parade of friends and members of the inner-circle, that no one is ever penalized for doing the bad but legal.

[Torrance]

I see nothing wrong with this as long as the companies are still on the hook to the US Government and the taxpayers. Serves these idiots right for having to go to the government with their hats in their hands.

[William Haskins]

of course it's the right thing to do... but it's just a bit of sugar to coat the american throat for the bad medicine being announced today, namely: a) they're about to hand out another $5 billion to banks and b) they're not very optimistic that the taxpayers will ever see the money paid back (referring to the hundreds of billions...)

WASHINGTON (AP) - The man who watches over the $700 billion in government money given to banks and other institutions to avert a financial collapse said Wednesday he thinks it's too early to say how much will be repaid to the taxpayers.

Just as the Obama administration prepares to announce a new TARP-like program for small community banks, Inspector General Neil Barofsky said he believes that "it's unrealistic to think we're going to get all of that money back."

The Treasury Department has spent more than $454 billion through TARP programs. Forty-seven recipients have paid back nearly $73 billion. That means more than $317 billion remains outstanding with the program set to expire Dec. 31.

Later Wednesday, President Barack Obama is expected to announce the community bank assistance effort. The American Bankers' Association has asked for $5 billion in rescue-fund money to help small banks extend more loans.

Asked on a nationally broadcast interview how he would grade the program, Barofsky said, "I think right now it would have to be an incomplete." Barofsky did say the program was successful in "pulling us back" from a financial collapse, however. At the same time, he told CBS's "The Early Show" that the resumption of huge executive bonus payments by some of the same institutions that benefited from the government bailout has sown distrust and cynicism among many taxpayers.

http://apnews.myway.com/article/20091021/D9BFFSOG0.html

[blacbird]

Well, that really is the role shareholders - to make sure the company is run effectively and efficiently and not destructive to itself or the community we all live in (a global one). Since so much of the ownership is concentrated in so few fund managers hands, and they have allowed companies to be run by a parade of friends and members of the inner-circle, that no one is ever penalized for doing the bad but legal.

Exactly.

Which is not to say that, in this peculiar circumstance, the companies involved don't merit some current governmental clampdown on exec compensation.

caw

[Gregg]

I have a vision of this unintended consequence:

The people who get their pay cut quit and go to work for a competitor for something close to their pre-cut salary.
The bailed out companies have to hire new employees to replace those who left. But at the low salary offered, they can only get poorly qualified people.
The company suffers and needs another bailout from the Feds.

I hope this doesn't happen, but one thing politicians don't seem to understand is that people react to their policies and laws. And often not in ways the politicians intended.

[William Haskins]

i have a couple of questions, one that requires factual knowledge i don't possess and one an opinion question:

does this impact the huge bonuses that were pooled prior to october 1st, when the new fiscal year began?

and

if not, are we being sold a bit of political theater in which the admin waited until october and these companies get a public slap on the wrist for fiscal 2010, while still getting their bonuses for fiscal 2009?

reference:

from october 16th:

The American economy continues to struggle, but these are flush times for the employees of Wall Street giant Goldman Sachs.

The company this week posted a $3.2 billion third-quarter profit, well above Wall Street estimates. In the second quarter of this year, Goldman made even more: a record $3.44 billion. On an average single day this quarter, according to the Guardian (http://www.guardian.co.uk/business/2009/oct/15/goldman-sachs-announces-profits-boom), the company made about $35 million.

And with Goldman, like other Wall Street banks, setting aside roughly half its revenue for employees, that means massive bonuses for the 31,700 people who work there. Goldman's bonus pool through September 30th now stands at 16.7 billion; the average employee compensation this year is expected to approach $700,000. Top executives will each make millions.

http://www.cbsnews.com/blogs/2009/10/16/politics/politicalhotsheet/entry5390155.shtml

[Wayne K]

WASHINGTON (AP) - The man who watches over the $700 billion in government money given to banks and other institutions to avert a financial collapse said Wednesday he thinks it's too early to say how much will be repaid to the taxpayers.


I'm going to go out on a limb and predict next to none.

[astonwest]

I figure the government will just amend their employment contracts to imprison them if they attempt to leave the company for other work in the same industry. I mean, if they can just negate employment contracts at will to eliminate bonus provisions, why not?

That being said, there are sometimes provisions which forbid you from taking a job from another competitor. They may not put the imprisonment clause in there, but I wouldn't put it past anyone in the government to amend contracts to make sure those non-compete clauses are in there.

[CACTUSWENDY]

Let me get this right. (IMHO.....and I will get flack for this....)

I tell my kid I will pay for the damage he did to the car as he did not have enough to cover the costs. AFTER....I pay it and time moves on.....I now tell him he will have to stop going to the ball games and movies. Hum....

I don't think you spell out the small print AFTER you have given the money, patted them on the head and sent them on their way.

I was and am not for the bail outs. This is just another area that the gov. has no idea how to put together a deal and cover all bases ahead of time. To me this is a joke.

If this was your business and Uncle helped you out and told you to clean up your act then came in way later and told you to cut pay and benefits to your staff....would you really sit still for it?

[GregB]

Well, that really is the role shareholders - to make sure the company is run effectively and efficiently and not destructive to itself or the community we all live in (a global one).

Shareholders care about share prices, and share prices were good until the house of cards fell down. In fact, telling shareholders that you can't match the numbers the guy's putting up down the Street because you're thinking long term and trying to protect the "community" is a good way to get replaced by the guy down the Street.

Greed affects everyone, even shareholders. It affects midlevel traders and entry-level mortgage brokers, too, when all of their compensation packages are based on short-term profits.

By all means, start at the top and work your way down. But the regulations need to go all the way down to the bone, or not much is going to be accomplished.

[clintl]

If shareholders actually held boards and executives responsible for poor performance, and didn't allow huge bonus payments and lavish perks in the worst layoff years, I'd think it would be as good as we could get to the private sector to moderate itself.

That would be nice, but most corporate boards are basically puppets of the CEO, and not the least bit interested in serving the interests of the shareholders.

[blacbird]

If shareholders actually held boards and executives responsible for poor performance, and didn't allow huge bonus payments and lavish perks in the worst layoff years, I'd think it would be as good as we could get to the private sector to moderate itself.

And this history of this actually happening is . . . ?

caw

[MattW]

And this history of this actually happening is . . . ?

cawThat would be none.

Everyone has short term vision - personal investors, CEOs, board members, fund managers, Congress, White House...

It can't hurt for a boy to dream?

[Don]

Why dream? Corporation are legal entities. Fix 'em or get rid of 'em. Remember this?
That whenever any form of legal entity becomes destructive to these ends, it is the right of the people to alter or to abolish it...
Well, so maybe I made one little change... :)

[Noah Body]

By all means, start at the top and work your way down. But the regulations need to go all the way down to the bone, or not much is going to be accomplished.

It won't happen.

Too much--maybe all--of our political establishment, those fair-minded folks who work up the legislation to be enacted--are directly tied to the upper tiers of these organizations. Enforcing appropriate oversight to ensure that things such as "corporate malfeasance" gets curbed takes money out of their own purses. No one gets elected or re-elected because they're a good guy/gal and the public believes in them and their policy statements. Advertising, face time on national TV, and greasing palms is what gets them into the big house.

And the cash to make that happen comes from places like Wall Street.

Sincerely,

NB, from Wall Street (actually Maiden Lane, but close enough)

[Julie Worth]

Why dream? Corporation are legal entities. Fix 'em or get rid of 'em.

No corporation should be too big to fail. The feds ought to break up these Wall Street cartels into much smaller pieces using the anti-trust laws. That by itself would take care of the overcompensation problem.

[icerose]

My opinion. Since they got all that money and they are wasting it on employees who do not deserve it they should be paying back what they took, with interest!

Everything that was paid out should have been a loan, with repayment demands and an interest set. They are a business they should act like one. Caps should be in effect until they fully repay back every cent and more to the tax payer.

[MattW]

My opinion. Since they got all that money and they are wasting it on employees who do not deserve it they should be paying back what they took, with interest!

Everything that was paid out should have been a loan, with repayment demands and an interest set. They are a business they should act like one. Caps should be in effect until they fully repay back every cent and more to the tax payer.
Hmm, this makes me wonder - why didn't FedGov buy large swaths of stock in these companies? I'm sure they needed the cash infusion more, and I know there's still some "ownership" by the government, but why couldn't that approach work too?

[Julie Worth]

Hmm, this makes me wonder - why didn't FedGov buy large swaths of stock in these companies? I'm sure they needed the cash infusion more, and I know there's still some "ownership" by the government, but why couldn't that approach work too?

That was what George Bush thought, that they were buying low and selling high.

[Gregg]

Hopefully this will put an end to the bailouts.

It's hard to imagine any corporation accepting money from the government when they know that the feds will try to control the company or change the rules of the game after the fact.

[William Haskins]

lol...

suckers.

Treasury Department pay czar Kenneth Feinberg last week announced sharp cuts in total compensation at the finance and auto companies under his control.


But while he cut total compensation by half, he substantially increased one important element -- regular salaries, according to a Wall Street Journal analysis. The move reflects the complexity of regulating something that mixes politics and economics.


http://online.wsj.com/article/SB125665671513110557.html?mod=rss_Today%27s_Most_P opular