Results tagged “executivepay”

Barclays CEO John Varley made his case for high executive pay, saying at London's St Martins-in-the-Field church that "profit is not satanic...Talent is highly mobile. If we fail to pay or are constrained from paying competitive rates then that talent will move to another employer," and later said in an interview, "Is Christianity and banking compatible? Yes. And is Christianity and fair reward compatible? Yes." Other bank executives have also been at other London churches to make their pitches—Goldman's Brian Griffiths said, "The injunction of Jesus to love others as ourselves is an endorsement of self-interest. We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all." We can't wait until American execs try that here! [Via Daily Intel]

The Obama administration is set to ask that executive compensation be dramatically lowered at seven companies which received the most government help. While the plan hasn't been made public yet, it's expected that pay will fall an average of 50% for the top 25 paid executives at Citigroup, Bank of America, American International Group, General Motors, Chrysler, GMAC and Chrysler Financial.

Mayor Bloomberg was on John Gambling's radio show this morning for their weekly chat, and the discussion turned to health care. Bloomberg said, "You know, last time I checked, pharmaceutical companies don't make a lot of money, their executives don't make a lot of money -- not that they couldn't be better." What you talking about, Willis? We suppose they don't make much next to Bloomberg, the richest man in NYC, but still. Which gave City Comptroller Thompson's campaign the opportunity to send a press release listing the salaries of the top-earning executives (#1 made $33 million, #17 made over $3 million) and to say, "Once again Mike proves that he just doesn’t get it." But then during a commercial break, Bloomberg revised his remarks, “I looked up the top pay of some of these executives in big pharma; some of them are making a lot of money... some of them are making a decent amount of—more than a decent amount of money.”

Congress voted yesterday to pass a bill curbing executive bonus pay, attempting to prevent what they call "perverse incentives" for execs in the face of a public outcry that came with news about big bonuses being handed out to bigwigs at some of the Bailout Babies of '08. The bill's passage came on the same day as a well-timed new report from Andrew Cuomo documenting how rampant big bonuses were at places like Citigroup and Goldman Sachs; AIG originally set off the bonus backlash earlier this year. The vote in Congress was primarily down party lines; Democrats tried to emphasize that shareholders would get a say in dictating just how much companies are warranted to dole out. It was also reported yesterday that CEOs have also lost out on another bonus—free lunch at the White House. In order to prevent any conflict of interest, the Obama administration has been billing executives who share a meal inside executive offices with the president. The News says there hasn't been a case of presidential penury since Jimmy Carter started charging Congressmen for coffee and danishes when they came to visit.

Attorney General Andrew Cuomo released a report on bank bonuses, which he had previously sent to House Oversight and Government Reform Committee Chair Eldophus Towns, yesterday, and in it, Cuomo continued to criticize Wall Street's compensation methods. The Wall Street Journal says the report gives a "rare window into the pay culture" of Wall Street:

Nine banks that received government aid money paid out bonuses of nearly $33 billion last year -- including more than $1 million apiece to nearly 5,000 employees -- despite huge losses that plunged the U.S. into economic turmoil...

Continue reading "AG Cuomo's Report Blasts Wall Street Bonuses"

Fat cats live! According to Bloomberg News, "JPMorgan Chase & Co.’s investment bankers will begin getting more of their pay in salary next year and less in bonuses as the bank shifts the weighting to remain competitive with rivals, a person familiar with the firm said." The plan, which will go into effect next year, will affect employees "who earn half or more of their total compensation in year-end bonuses." However, total compensation won't change, because bonuses will go down. Bloomberg further explains, "JPMorgan... is seeking to keep pace with rivals that boosted salaries amid restrictions on bonuses, and make its compensation costs more predictable... Citigroup will raise base pay as much as 50 percent. Morgan Stanley said in May it will increase base pay for some executives, while UBS increased banker salaries by half." A pay consultant added, "Most of the major financial firms have suppressed base salaries for the last 10 years, so they were unduly low compared to where they were 15 years ago." Well, unduly low without bonuses.

Hey, hey: The Wall Street Journal reports, "Citigroup Inc. has told about five former top executives that it won't pay them tens of millions of dollars in promised severance payouts, according to people familiar with the matter." While Citi has already paid "more than half of the roughly $100 million it promised to the former executives..company officials recently decided not to proceed with the remaining payments, concluding that they wanted to avoid even the possibility of a public backlash over the money." The U.S. government has aided Citigroup with $50 billion. While the former employees' contracts with Citi require the company to pay out the severances, the WSJ explains, "bank officials essentially are wagering that the former executives will conclude that it would be publicly embarrassing for them to file lawsuits against the struggling, taxpayer-backed company seeking the money."

Treasury Secretary Timothy Geithner wants reform of corporate incentives, rather than capping executive pay. He said yesterday, during a Newsweek-sponsored luncheon, "I don't think our government should set caps on compensation," even for companies getting TARP money. He pointed out, "You had a crisis magnified by the fact that people were paid to take a huge amount of short-term risk. And that's something that's preventable...I think we can bring about broader reforms of compensation incentives in finance as a whole. We’ll make it much less likely that people get paid to take large amounts of short-term risk at the expense of their firm and the system as a whole." He suggested instead that the government require that compensation be tied into long-term performance.

get bonuses this year. A NY Times editorial, which acknowledges that Thain's actions probably saved Merrill, says, "Bankers and financial regulators will ultimately have to design a pay structure that rewards bankers for the performance of their strategies over several years, not just the current year or quarter."