At rescued banks, perks keep rolling
Bosses benefit after bailout. Fringe compensation rose 4 percent last year.
By Tomoeh Murakami Tse
WashPost
Tuesday, October 20, 2009
NEW YORK -- Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.
The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.
Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.
Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.
(More here.)
By Tomoeh Murakami Tse
WashPost
Tuesday, October 20, 2009
NEW YORK -- Even as the nation's biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.
The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.
Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.
Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.
(More here.)
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1 Comments:
So, if Bush and Obama would have simply let these firms and banks go to bankruptcy, would we even be here reading about massive bonuses paid to these firms? Would we be talking about a jobless recovery? Of course, the government is completely to blame - first, they made these institutions 'too big to fail' by allowing to many mergers and acquisitions that our economy has now only a few key pillars that if any of them fail, the system will collapse; second, Bush and Obama bailed them out squeezing out private capital from the recovery leaving only public money to right the ship. As we saw with 'Cash For Clunkers', in order to sustain the activity, the public money has to keep rolling in, ostensibly forever. which is why any recovery will be a jobless recovery because who is going to invest in something when we have no clue what the government is going to do next - bailout, bankruptcy, outright takeover? As an investor myself, I'm not going to put my money in the market when I have no clue what return I might get. And now that Obama is printing money like a master counterfeiter, any investment I make today will be devalued in the future because of inflation - therefore, interest rates have to go up in order for me to recoup my investment (otherwise, why invest when the value of your investment will be less in 10 years than it is today because we are printing money?). The economy may be growing slightly, but that's only because expenses in private sector have been slashed to the bone. But not for those receiving government aid - it's party time!
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