Gosh……talk about a sweet deal! Get billions from the federal government of taxpayer money and use over $100b of it for bonuses….what a great use of our money to say them from bankruptcy…..I’m about to post another article…“Morgan Chase Exec Brags Bailout Is for Takeovers, Restructuring, Not Lending”
By Lorraine Woellert and Christine Harper
Oct. 28 (Bloomberg) — Congressional investigators demanded Citigroup Inc., Goldman Sachs Group Inc. and seven other banks justify billions of dollars in pay and bonuses after they accepted $125 billion as part of a taxpayer-funded bailout.
In letters to the nine firms today, Representative Henry Waxman, chairman of the House Committee on Oversight and Government Reform, said they collectively will pay $108 billion in employee compensation and bonuses in the first nine months of 2008, almost the same amount as last year.
“I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry’s worst years on record,” Waxman wrote. He cited an Oct. 27 Bloomberg News article detailing how Goldman, Morgan Stanley and Merrill Lynch & Co. have already accrued $20 billion to pay bonuses this year.
The letter was also sent to Bank of America Corp., Bank of New York Mellon, JPMorgan Chase & Co., Merrill Lynch, Morgan Stanley, State Street Corp. and Wells Fargo & Co. Waxman asked the firms to supply the information by Nov. 10.
Citigroup “will adhere to the requirements in the government program including restrictions on executive compensation,” said Michael Hanretta, a New York-based spokesman of the bank, in an e-mail.
Spokespeople for the other firms declined to comment or didn’t immediately reply to requests for comment.
Senator Olympia Snowe, a Maine Republican, issued a statement today saying she was “deeply frustrated by Wall Street’s plan to distribute billions of dollars” in pay and bonuses. “Financial institutions that have accepted federal assistance should be required to face consequences from their earlier bad decisions and cancel these bonuses,” she said.
Waxman also asked for the number of employees paid or projected to be paid more than $500,000, as well as the total and projected compensation for the banks’ 10 highest-paid employees.
More than one-third of Wall Street employees surveyed by a recruitment Web site expect a bigger bonus this year than last year even amid the worst financial crisis since the Great Depression.
The online survey of 1,300 people was conducted between Oct. 13 and Oct. 21, according to an e-mailed statement from eFinancialCareers, owned by New York-based Dice Holdings Inc.
Last Updated: October 28, 2008 22:03 EDT