« | »

Pay Czar Gave TARP Execs $5M Plus Salaries

From the New York Daily News:

Treasury Department approves huge paydays for execs at firms who received TARP bailout money

Scathing audit: Government approved pay packages worth $5M or more for 49 executives

By Juan Gonzalez
Thursday, January 26, 2012

The Treasury Department approved pay packages worth $5 million or more for 49 executives at a handful of firms that received the biggest taxpayer bailouts between 2009 and 2011.

A scathing new audit this week by the inspector general for the Troubled Asset Relief Program blasted those payments, all of which occurred despite a $500,000 salary cap that President Obama and Congress established in 2009 at firms receiving “exceptional assistance” under TARP.

Treasury Department and Federal Reserve Bank of New York officials joined behind the scenes with the bailed-out firms to repeatedly pressure Kenneth Feinberg, the special federal master overseeing the compensation packages, to approve higher salaries, the audit found.

So Treasury and the Federal Reserve were pushing for these salaries? Is there nobody on the taxpayers’ side?

Feinberg had the power to allow waivers to the cash cap, but the report found the program’s contradictory goals meant “he could not effectively rein in excessive compensation.”

The CEO of one bailed-out firm, Ally Financial, actually complained that one of his underlings, who was paying for private school for his kids, would be “cash poor” if relegated to a salary of just $500,000

Well, if he lives in Manhattan, he could have a point.

AIG repeatedly insisted on the biggest pay packages and represented 80% of Feinberg’s “headaches,” the audit said. The company received more than $180 billion in federal bailout money in 2008, and even today, after paying back billions, it is still 70% owned by the federal government.

But at the recession’s height in spring 2009, AIG had the audacity to press Feinberg for raises ranging from 20% to 550% for its top employees, the report said

What’s more, AIG wanted those salaries in cash, not stock. Company execs confided to Feinberg that the firm’s common stock was “essentially worthless,” the report said.

To his credit, Feinberg resisted the most outrageous salary demands, but he still approved dozens above the government’s $500,000 cash cap. In 2009, for instance, he approved a $10.5 million package for AIG chief executive Robert Benmosch, which included $3 million in cash.

The following year, Feinberg approved another $10.5 million for Benmosch, while signing off on packages of from $3 million to $7.6 million for 17 of AIG’s 22 top employees.

Ally CEO Michael Carpenter got approval for an $8.1 million package. General Motors chief Fritz Henderson got $5.1 million

We sure are in the wrong business. Or, rather, we sure don’t know the right politicians.

This article was posted by Steve on Friday, January 27th, 2012. Comments are currently closed.

One Response to “Pay Czar Gave TARP Execs $5M Plus Salaries”

  1. P. Aaron says:

    Gov’t payola=Good. Honestly Earned money=Bad

« Front Page | To Top
« | »