Saturday, August 01, 2009
Having corrupted the meaning of the word “bonus” in the American lexicon, the nation’s largest banks rewarded employees to the tune of $32 billion last year while losing more than twice that amount and having to accept even larger sums from the federal government to stay afloat. The figures were released in a report by New York Attorney General Andrew Cuomo, who asked the question, “If the bank lost money, where do you get the money to pay the bonus?”
Nine leading financial institutions, including Citigroup Inc., Merrill Lynch & Co., Goldman Sachs, Bank of America, and Morgan Stanley, paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008. Seven of the banks absorbed $175 billion in taxpayer funds from the federal bailout program. At Goldman Sachs, just 200 bankers and traders reaped bonuses of almost a billion dollars.
News of the billion-dollar bonuses is likely to add fuel to attempts by lawmakers on Capitol Hill to limit extravagant compensation by banks. On Friday, the House of Representatives voted 237-185 for a bill that would order bank regulators to restrict “inappropriate or imprudently risky” pay packages at institutions whose assets are more than $1 billion.
-Noel Brinkerhoff
Bankers Reaped Lavish Bonuses During Bailouts (by Louise Story and Eric Dash, New York Times)
Banks Paid $32.6 Billion in Bonuses Amid U.S. Bailout (by Karen Freifeld, Bloomberg)
NY AG: Citigroup, Which Got $45 billion in Govt. Money, Paid More Than $5 Billion in Bonuses (by Stephen Bernard, Associated Press)
House Approves Limits on Executive Pay (by Andrea Fuller, New York Times)
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