White House to push for big pay cuts

[Skip8282]

About Time!!   


NEW YORK (CNNMoney.com) -- The Obama administration will soon order the nation's biggest bailed-out companies to drastically cut pay packages for their top executives, a senior administration official confirmed to CNN Wednesday.

Kenneth Feinberg, who was named the White House's pay czar in June, will demand that the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.

For the past two months, Feinberg has been reviewing pay plans at Citigroup (C, Fortune 500), AIG (AIG, Fortune 500), Bank of America (BAC, Fortune 500), General Motors, Chrysler, GMAC and Chrysler Financial in an effort to put these firms in a position to pay back bailout money as soon as possible.

0:00 /04:04John Mack: We were wrong on pay
Under the plan, which is expected to be officially released by the Treasury Department next week, annual salaries for executives at those seven firms are expected to fall 90%, on average, the official said.

Another source in the Treasury Department told CNN that Feinberg is "trying to strike the balance" between protecting taxpayers and allowing companies to have the ability to "grow their way out of TARP."

Some compensation experts have worried that the firms that have received the most bailout funds could wind up losing top talent to companies that have already paid back the government and are not subject to Feinberg's pay restrictions, such as JPMorgan Chase and Goldman Sachs.

According to other reports, the plan will come down particularly harsh on embattled insurer AIG. Within AIG's controversial Financial Products division, the unit that led to the company's near collapse, no employee is expected to receive more than $200,000 in total compensation, several reports indicated.

The Wall Street Journal also reported Feinberg is expected to demand a series of governance changes at the seven firms -- including splitting the role of chief executive officer and chairman.

The Treasury Department had no comment. AIG, Bank of America, Chrysler Financial and GM also declined to comment. Chrysler, Citigroup and GMAC were not immediately available for comment.

But the moves by Feinberg should not come as a major surprise. Last week, outgoing Bank of America CEO Ken Lewis said he would not accept a salary or bonus for 2009, and the bank said the decision came after Feinberg "suggested" it to Lewis.

Lewis' decision followed an uproar over indications that he is poised to walk away with a minimum of $53 million in pension benefits after he retires.

Lewis' cash salary has been $1.5 million annually since he took over as CEO in 2001. But he actually made $63 million in pay and perks over the past three years, according to filings -- including almost $10 million last year.

Other high-profile CEOs have also taken it upon themselves to act before the government did. Citigroup chief Vikram Pandit, for example, declared earlier this year that he would accept pay of just $1 a year and no bonus until his firm returned to profitability. Just a year ago, Pandit took home $10.8 million in salary, stock and options.



http://money.cnn.com/2009/10/21/news/companies/feinberg_compensation/index.htm

[Hugo Chavez]

it's just talk, it'll never happen, but I think it should.

[SAMSON123]

it's just talk, it'll never happen, but I think it should.

It will happen, but it will just be a game. Sort of how some of the mayors and govenors in america accept the position working only for one dollar per year. On the surface that looks nice, in the back room however private businesses are cutting deals with the new mayor and or governor and he is receiving MASSIVE kickbacks that profit him many times more than the salary he gave up.

It is shown right here in the article

Lewis' cash salary has been $1.5 million annually since he took over as CEO in 2001. But he actually made $63 million in pay and perks over the past three years, according to filings -- including almost $10 million last year.

CORRUPTION CONTINUES AT ITS STEADY PACE

[Skip8282]

It will happen, but it will just be a game. Sort of how some of the mayors and govenors in america accept the position working only for one dollar per year. On the surface that looks nice, in the back room however private businesses are cutting deals with the new mayor and or governor and he is receiving MASSIVE kickbacks that profit him many times more than the salary he gave up.

It is shown right here in the article
CORRUPTION CONTINUES AT ITS STEADY PACE

Then for phase II they need to go after the perks.  As far as I'm concerned, none of these welfare recipients should be living lavishly if they've accepted tax payer money. 

[quadzilla456]

I love how Goldman Sachs is exempt from this. Must be nice for Tiny Tim and Hank Paulson that their former employer is doing so well. What surpises me more than their phenomenal money generating talent is the fact that they are still oxygen thieves on this beautiful planet. You would think that somebody would have taken care of these scum by now - I wonder if there will be any takers in the future?

These guys are indispensable to this country. They have invented a great product (money). They use their brains to make America a great place. God bless them

God Bless America!

[SAMSON123]

Then for phase II they need to go after the perks.  As far as I'm concerned, none of these welfare recipients should be living lavishly if they've accepted tax payer money. 

These BACKROOM deals are illegal and are rarely known until a whistleblower exposes it. Since these deals are not known in most cases there will be no way of going after them unless every person operating in such capacity is jailed in a glass room where all business decisions/dealings are on view 24/7. Sadly even the OVERSEERS are just as corrupt as the main crook, so is there anyone actually watching the hen house?

Look at how Obama brought in all of the thieves from Goldman Sachs: Geithner, Kashkari(sic) and a new 29 year old Goldman employee (forgot his name now)... EVERYONE IS A CROOK who oversees the crooks to make sure their crooked schemes go to fruition.

[Straw Man]

I love how Goldman Sachs is exempt from this. Must be nice for Tiny Tim and Hank Paulson that their former employer is doing so well. What surpises me more than their phenomenal money generating talent is the fact that they are still oxygen thieves on this beautiful planet. You would think that somebody would have taken care of these scum by now - I wonder if there will be any takers in the future?

These guys are indispensable to this country. They have invented a great product (money). They use their brains to make America a great place. God bless them

God Bless America!

interesting

can't say I disagree

[Alex23]

This will help our nation being more "agile" and more being "competitive"

[Hugo Chavez]

It will happen, but it will just be a game. Sort of how some of the mayors and govenors in america accept the position working only for one dollar per year. On the surface that looks nice, in the back room however private businesses are cutting deals with the new mayor and or governor and he is receiving MASSIVE kickbacks that profit him many times more than the salary he gave up.

It is shown right here in the article
CORRUPTION CONTINUES AT ITS STEADY PACE

i seriously doubt it's going to happen.  you really believe it will?

[SAMSON123]

i seriously doubt it's going to happen.  you really believe it will?

YES I DO!..Just looking at the CROOKS Obama has brought into his administration tells me that nothing will change and it will be corruption as usual. That CAP on salaries looks good on the surface, but under the surface is a whole other reality. Now be it AIG, Goldman etc these Wall Street corps put Obama on the map and in the whitehouse in exchange for something...what is that something? That something is their opportunity to make as much money, as quickly, in everyway and as corruptly as possible. But they can't just do it right out in the open...it has to be stealth or wrapped in the cloak of HONEST BUSINESS, like seen here with salary caps.

When i first heard of the governors and mayors working for a dollar or no pay at all..on the surface it seemed extraordinarily nice...maybe the person was being patriotic to the state or city he wished to work. Then came the connections to Organized crime, the connection to real estate moguls, the connection to big city/state contracts and unions for massive projects like highway construction, sewage and city roadway construction, police and fire department unions etc etc. When it was all said and done the mayors and governors who would have had hefty salaries from their respective city or state, had they accepted them, were living lavishly in mansion homes, riding in the finest cars, were always seen in the company of heads of this or heads of that company/corporation/financial institute/university....and no one said HOW IS THAT? Truth is they were and are getting massive kickbacks better than their salary ever could be. Ironically Tony Blair was questioned about his lavish living in England based upon his salary (since he is Mr. honesty...RIGHT!). He refused to speak on it, but investigations revealed quite a bit of backroom deals of which he profitted heavily from. Bloomberg in NY is one of the worst. He has profitted from everything from the building of Yankee Stadium to the reconstruction of the Freedom Tower (now renamed World Trade Center)... ALL BACKROOM, ALL DIRTY DEALING, ALL CASH MONEY!!!!

Give it time...you will see..

[Hugo Chavez]

salary caps won't happen.  it's just something for their cheerleaders.  zero way it happens...  won't even come close to happening.  it's bullshit.

[240 is Back]

not sure I like this.

Yes, the leaders of these companies are getting record bonuses for doing nothing but shrugging at their misfortune and collecting govt handouts.  But once you cut the salaries, they leave and go work overseas for a lot more $.

However, since these companies are all using US taxpayer funds to stay afloat, we can make them wear polka dots every day to work.... and if they don't like it, they can go the F outta business.  The minute you are insolvent and need a 3rd party to pump $ into you, then you SHOULD lose a nice chunk of control.   You obviously need training wheels if your mgmt of a firm almost led to collapse of US banking industry.

[Skip8282]

not sure I like this.

Yes, the leaders of these companies are getting record bonuses for doing nothing but shrugging at their misfortune and collecting govt handouts.  But once you cut the salaries, they leave and go work overseas for a lot more $.

Good riddance.  These are the same companies that if a person falls behind on their mortgage they take their homes.  These are the same companies that if a person fails to make their credit card payments timely jack up the interest rates to loan shark levels.  And now we're expected to give them an interest free loan AND let them do whatever the fuck they want?

These companies don't have "top talent", they have "top scam artists".

[GigantorX]

I love how Goldman Sachs is exempt from this. Must be nice for Tiny Tim and Hank Paulson that their former employer is doing so well. What surpises me more than their phenomenal money generating talent is the fact that they are still oxygen thieves on this beautiful planet. You would think that somebody would have taken care of these scum by now - I wonder if there will be any takers in the future?

These guys are indispensable to this country. They have invented a great product (money). They use their brains to make America a great place. God bless them

God Bless America!

Hank was hand in hand with Goldman during the Lehman debacle. He had them (Lehman) totally open their books to Goldman for no apparent reason (they were a direct competitor) and he was def. in contact with Goldman throughout the financial crisis.

The presidents change but the bankers stay the same. I think that is our main problem.

[Soul Crusher]

Hank was hand in hand with Goldman during the Lehman debacle. He had them (Lehman) totally open their books to Goldman for no apparent reason (they were a direct competitor) and he was def. in contact with Goldman throughout the financial crisis.

The presidents change but the bankers stay the same. I think that is our main problem.

I have a good idea -

HOW ABOUT WE LET THESE CRIMINAL BANKSTERS FAILA ND SHARE JAIL CELLS WITH THE RAPISTS, MURDERERS, PEDOPHILES, AND DRUG DEALERS THEY ARE JUST AS BAD AS?   

[Hedgehog]

not sure I like this.

Yes, the leaders of these companies are getting record bonuses for doing nothing but shrugging at their misfortune and collecting govt handouts. But once you cut the salaries, they leave and go work overseas for a lot more $.

However, since these companies are all using US taxpayer funds to stay afloat, we can make them wear polka dots every day to work.... and if they don't like it, they can go the F outta business.  The minute you are insolvent and need a 3rd party to pump $ into you, then you SHOULD lose a nice chunk of control.   You obviously need training wheels if your mgmt of a firm almost led to collapse of US banking industry.

Where would they get more paid?

The CEO's in Sweden have been using this argument for years in order to boost their salaries.

Yet, the one Swedish company that is the most successful - IKEA - is widely known for keeping moderate salaries across the board.

Japanese corporate culture doesn't include extreme salaries for the executives.

Yet Japanese corporations are among the most succesful in the world.

[Soul Crusher]

Where would they get more paid?

The CEO's in Sweden have been using this argument for years in order to boost their salaries.

Yet, the one Swedish company that is the most successful - IKEA - is widely known for keeping moderate salaries across the board.

Japanese corporate culture doesn't include extreme salaries for the executives.

Yet Japanese corporations are among the most succesful in the world.

We have far too much money being wasted, squandered, stolen, etc on these bankers. 

Let these corporate communists compete like the rest of us in the real economy  and see if they can duplicate their "great results" if they are not happy with this. 

I am so sick of these bankers and the millions and millions of dollars they waste and squander that adds nothing to the real economy.   

[Hedgehog]

We have far too much money being wasted, squandered, stolen, etc on these bankers. 

Let these corporate communists compete like the rest of us in the real economy  and see if they can duplicate their "great results" if they are not happy with this. 

I am so sick of these bankers and the millions and millions of dollars they waste and squander that adds nothing to the real economy.   

You know, there is this culture of corporate board of directors where you got people who are members on multiple boards.

Ed Whiteacre is a good example. Member of Exxon, and General Motors. Talk about sitting on multiple chairs. And several other interests as well.

http://en.wikipedia.org/wiki/Edward_Whitacre,_Jr.


Guys like him are appointing their own frat brothers to become CEO's.

AND - they set their salaries.

There is little or no incitements for a board of directors to keep a salary of a CEO down.

Since that would limit their own salary, since the CEO salary usually is used to base their salaries on.

[Soul Crusher]

You know, there is this culture of corporate board of directors where you got people who are members on multiple boards.

Ed Whiteacre is a good example. Member of Exxon, and General Motors. Talk about sitting on multiple chairs. And several other interests as well.

http://en.wikipedia.org/wiki/Edward_Whitacre,_Jr.


Guys like him are appointing their own frat brothers to become CEO's.

AND - they set their salaries.

There is little or no incitements for a board of directors to keep a salary of a CEO down.

Since that would limit their own salary, since the CEO salary usually is used to base their salaries on.

Thats why Too Big to Fail is pure evil. 

[12secGT]

I think the banks should have to pay the tax payers back before getting ANYTHING. Then once paid up, they can do what they want, legally. I don't agree that our gov't can limit pay to anyone. This is dangerous and I say quite hypocritical on the left since the ACLU and others are nowhere to be found here... unless you wire tap terrorists and then WATCH OUT!!!!!  

[Soul Crusher]

I think the banks should have to pay the tax payers back before getting ANYTHING. Then once paid up, they can do what they want, legally. I don't agree that our gov't can limit pay to anyone. This is dangerous and I say quite hypocritical on the left since the ACLU and others are nowhere to be found here... unless you wire tap terrorists and then WATCH OUT!!!!!  

Go Watch that Video "The Fall of the Republic" 

This video was very well done.  Anyone who still supports this Admn needs their freaking head examined.   

[12secGT]

Go Watch that Video "The Fall of the Republic" 

This video was very well done.  Anyone who still supports this Admn needs their freaking head examined.   

I will. Make no mistake, I think Obama is way over his head, has a scary agenda and we need to marginalize him by voting against his support in the midterm elections.

[Kazan]

I think the banks should have to pay the tax payers back before getting ANYTHING. Then once paid up, they can do what they want, legally. I don't agree that our gov't can limit pay to anyone. This is dangerous and I say quite hypocritical on the left since the ACLU and others are nowhere to be found here... unless you wire tap terrorists and then WATCH OUT!!!!!  

Yeah sounds like another country, I think it was the USSR, and we know how that turned out. I think pay should be limited to that asshats in congress it is all to apparent many of them aren't doing their jobs worth a shit "cough" Barney Frank"cough"

[Skip8282]

I think the banks should have to pay the tax payers back before getting ANYTHING. Then once paid up, they can do what they want, legally. I don't agree that our gov't can limit pay to anyone. This is dangerous and I say quite hypocritical on the left since the ACLU and others are nowhere to be found here... unless you wire tap terrorists and then WATCH OUT!!!!!  

As far as I know, they're not trying to limit the pay of companies who are NOT on welfare.  But, for the companies that are on welfare, they don't get luxuries until the money is paid back.

333386 is right.  We should never have bailed them out and just let stronger, more competitive companies step in to fill the gap.  But that didn't happen and now that they have accepted welfare, the priority is paying back the money.

I'd love to see anybody on this board who owns a home call their mortgage company and tell them that they won't be paying the full mortgage each month because they decided to keep for themselves a bigger chunk of their paycheck. 

[Purge_WTF]

  A private business that hasn't engaged in corrupt activity should be allowed to grow and profit the way it wants. On the other hand, we should've just let those Wall Street bastards file Chapter 11, and now that they've been bailed out with our money (and our kids' money, and probably our grandkids' money), there should be restrictions put in place.