Archive for the ‘compensation’ Category

Government To Have Bigger Role in All American Lives; Obama Seeks to Increase Oversight of Executive Pay

March 21, 2009

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.

By STEPHEN LABATON
The New York Times
.
The outlines of the plan are expected to be unveiled this week in preparation for President Obama’s first foreign summit meeting in early April.

Increasing oversight of executive pay has been under consideration for some time, but the decision was made in recent days as public fury over bonuses has spilled into the regulatory effort.

Related:
Financial Advice, Recovery, Trumped by Obama, Congress, Media, Polls 

Wall Street Journal: “Geithner Incapacitated;” President Voices Support

The officials said that the administration was still debating the details of its plan, including how broadly it should be applied and how far it could range beyond simple reporting requirements. Depending on the outcome of the discussions, the administration could seek to put the changes into effect through regulations rather than through legislation.

One proposal could impose greater requirements on the boards of companies to tie executive compensation more closely to corporate performance and to take other steps to assure that outsize bonuses are not paid before meeting financial goals.

The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission. Last month, as part of the stimulus package, Congress barred top executives at large banks getting rescue money from receiving bonuses exceeding one-third of their annual pay.

Beyond the pay rules, officials said the regulatory plan is expected to call for a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.

It will propose that many kinds of derivatives and other exotic financial instruments that contributed to the crisis be traded on exchanges or through clearinghouses so they are more transparent and can be more tightly regulated. And to protect consumers, it will call for federal standards for mortgage lenders beyond what the Federal Reserve adopted last year, as well as more aggressive enforcement of the mortgage rules.

The plan is being put together in advance of the meeting of the Group of 20 industrialized and developing nations in London, an annual event that is expected to be dominated by the global financial crisis and discussions about better oversight of large financial companies whose problems could threaten to undermine international markets.

An important part of the plan still under debate is how to regulate the shadow banking system that Wall Street firms use to package and trade mortgage-backed securities, the so-called toxic assets held by many banks and blamed for the credit crisis.

Officials said the plan would also call for increasing the levels of capital that financial institutions need to hold to absorb possible losses. But in a sign of the fragility of the economic system officials said the administration would emphasize that those heightened standards should not be imposed now because they could discourage more lending. Rather, they would be put in place after the economy began to rebound.

“The argument some are making is that they don’t want to be stepping on the gas pedal and the brake at the same time,” said Morris Goldstein, a senior fellow at the Peterson Institute for International Economics and a former top official at the International Monetary Fund.

Administration officials are also debating how tightly to supervise hedge funds. A broad consensus has emerged among regulators and administration officials that hedge funds must be registered and more closely monitored, probably by the Securities and Exchange Commission. But officials have not decided how much the funds will have to disclose about their investments and trading practices.

A central aspect of the plan, which has already been announced by the administration, would give the government greater authority to take over and resolve problems at large, troubled companies that are not now regulated by Washington, like insurance companies and hedge funds.

Read the rest:
http://www.nytimes.com/2009/0
3/22/us/politics/22regulate.htm
l?_r=1&hp

NYT:
http://www.nytimes.com/

Bankers Press Case Against Punitive Tax 

Obama, Geithner, Congress Squandering Confidence Needed For Recovery

Bonus backlash hits Wall Street

American Democracy With Checks and Balances is Broken; Media, Congress Failing

Obama’s Radicalism Is Killing the Stock Market

 Obama Spending, Tax Plans Likely Out The Window As CBO Predicts Much More Debt

Obama: Why Are We Saving Geithner and His Incestuous Relationship With Wall Street?

Finance, one of America’s great industries, being destroyed by Congress during crisis?

For Cuomo, AIG, Financial Crisis Is His Political Moment

 Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?

Michelle Malkin:
http://michellemalkin.com/2009/0
3/21/liveblogging-the-lexington
-ky-tea-party/

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Bankers Press Case Against Punitive Tax

March 21, 2009

An alarmed banking industry looked for friends in Washington yesterday as it tried to head off severe congressional restrictions on compensation, fearful that a wave of popular anger about vast paydays will result in permanent damage to the industry.

After a week of unexpected setbacks for an industry accustomed to deference, bank executives said they were now racing to convince Congress and the Obama administration that imposing punitive taxes on bonuses would unfairly punish thousands of people for the sins of a few. Executives also argued that hitting banks would hurt the broader economy.

By Binyamin Appelbaum
The Washington Post

“We are working in every appropriate way with policymakers in Washington, and with other financial institutions and industry associations, to come to agreement on a constructive industry compensation system that is good for the company, the financial system and the country,” Citigroup chief executive Vikram Pandit said in a memo sent to employees.

The stakes are especially high because the Treasury Department is moving ahead with a critical initiative that involves persuading private investors to buy troubled assets from banks. The administration, which could unveil more details of this plan as early as Monday, is deeply worried that investors will be afraid to participate, Treasury officials say.

The Treasury plan would include three primary components, drawing on resources from the Federal Deposit Insurance Corp., the Federal Reserve and private investors, officials say.

Congress remained at a fever pitch, with several members issuing new demands that various companies rescind various bonuses. Long-simmering anger about lavish paydays on Wall Street has erupted since the disclosure last weekend that American International Group, bailed out by the government, still had paid $165 million in new bonuses to the company’s most troubled division.

But there were signs that others in official Washington were more sympathetic to industry concerns. Two of the nation’s senior banking regulators indicated in speeches that compensation should be tied to performance, the point of bonuses.

Fed Chairman Ben S. Bernanke said banks should structure compensation to reflect contributions to a company’s health and profitability. He said problems arose when employees were rewarded for short-term results that created long-term risks.

Read the rest:
http://www.washingtonpost.com/wp-d
yn/content/article/2009/03/20/AR20
09032003737.html?hpid=topnews

Read the rest:
President, Treasury, Congress “undermining efforts to shore up the economy”

Obama, Geithner, Congress Squandering Confidence Needed For Recovery

Bonus backlash hits Wall Street

March 21, 2009
Congress may undo a decades-old compensation system, alarming bankers but pleasing those who believe ‘financial buccaneers’ deserve payback.
By Walter Hamilton and Tom Hamburger
Los Angeles Times
March 21, 2009
Reporting from Washington and New York — As Washington’s anti-bonus zeal intensified Friday, alarm spread across Wall Street that the government’s sudden taxation fervor could ensnare thousands of workers and affect every major financial firm.

Although the fast-moving legislative campaign was born of frustration with the bonuses paid to workers at ailing American International Group Inc., employees at comparatively healthy investment banks fretted about the steep tax hikes they could face if the legislation became law.

Read the rest:
http://www.latimes.com/business/la
-fi-bonuses21-2009mar21,0,2125832.story

Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?

March 18, 2009

Despie President Obama’s many anti-big business, anti-executive and anti-Wall Street pronouncements, he never could gain much traction with the public and the congress until just this week.

That, and the view that we should “Never let a good crisis go to waste” makes one wonder why the AIG bonus crisis was left unreported until just now?

And Obama’s faux outrage at AIG reminded me of the movie “Casablanca” when Captain Renault said, “I’m shocked, shocked to find that gambling is going on in here!”

Why do we have our national panties in a bunch over less then $200 million while we are spending trillions?

The answer could be that this is the crisis, the tool, the White House was waiting for to open the door to tougher standards on pay, bonuses, aircraft and other perks for an army of top executives….

This may be about government intrusion into corporate life in America much more than it is about AIG and Geithner.

But Geithner is a friend of Wall Street and Summers is a friend of both and Obama hired them both…..

Obama: Why Are We Saving Geithner and His Incestuous Relationship With Wall Street?

I mean, the president is offering in his budget to intrude upon every other corner of American life — why not the captains of Wall Street?

You don’t think the term “Big Oil” was an accident, do you?

“This is a manipulation of the media and the public, simple as that,” a long time political operative told us.  “Don’t underestimate these guys.”

Treasury Secretary Timothy F. Geithner, left, President Obama and Vice President Joseph R. Biden Jr. in the Oval Office. Rahm Emanuel is just outside the camera’s view.  Photo: Stephen Crowley/The New York Times

From The New York Times, January 29, 2009:
“Obama Outraged, Calls Wall Street Bonuses ‘Shameful'”
http://www.nytimes.com/2009/01/30/
business/30obama.html

*************

By JULIE HIRSCHFELD DAVIS, Associated Press

Cue the outrage. For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off government bailouts. It wasn’t until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back.

Why the sudden furor, just weeks after Barack Obama’s team paid out $30 billion in additional aid to the company? So far, the administration has been unable to match its actions to Obama’s tough rhetoric on executive compensation. And Congress has been unable or unwilling to restrict bonuses for bailout recipients, despite some lawmakers’ repeated efforts to do so.

The situation has the White House and Treasury Secretary Timothy Geithner on the defensive. The administration was caught off guard Tuesday trying to explain why Geithner had waited until last Wednesday to call AIG chief executive Edward M. Liddy and demand that the bonus payments be restructured.

Neither Obama nor Geithner learned of the impending bonus payments until last week, senior administration officials told The Associated Press late Tuesday, speaking on condition of anonymity about internal discussions.

Publicly, the White House expressed confidence in Geithner — but still made it clear he was the one responsible for how the matter was handled.

“I do know that Secretary Geithner last week engaged with the CEO of AIG to communicate what we thought were outrageous and unacceptable bonuses,” White House spokesman Robert Gibbs said. Gibbs declined to provide a timeline that would show when members of the administration — including the president and others at the White House — became aware of the bonuses.

In an interview with The Associated Press, Obama’s chief economic adviser Lawrence Summers said: “In the context of what we’re doing, Secretary Geithner was notified, he has said, last week. As he reported to the rest of us, he moved aggressively and immediately, aggressively and immediately, to recoup whatever could be legally recouped. He recognized that you can’t just abrogate contracts willy-nilly, but he moved to do what could be done.”

The bonus problem wasn’t new, as many lawmakers and administration officials knew only too well. AIG’s plans to pay hundreds of millions of dollars were publicized last fall, when Congress started asking questions about expensive junkets the company had sponsored. A November SEC filing by the company details more than $469 million in “retention payments” to keep prized employees.

Back then, Rep. Elijah E. Cummings, D-Md., began pumping Liddy for information on the bonuses and pressing him to scale them back. “There was outrage brewing already,” Cummings said. “I’m saying (to Liddy), ‘Be a good citizen. … Do something about this.’ ”

Around the same time, outside lawyers hired by the Federal Reserve started reviewing the bonuses as part of a broader look at retention and compensation plans, according to government officials who spoke on condition of anonymity. The outside attorneys examined the possibility of making changes to the company plans — scaling them back, delaying them or rescinding them. They ultimately concluded that even if AIG’s bonuses were withheld, the company would probably be sued successfully by its employees and be forced to pay them, the officials said.

In January, Reps. Joseph E. Crowley of New York and Paul E. Kanjorski of Pennsylvania wrote to the Federal Reserve and the Treasury Department pressing the administration to scrutinize AIG’s bonus plans and take steps against excessive payments.

Read the rest:
http://news.yahoo.com/s/ap/2009031
8/ap_on_go_pr_wh/aig_what_di
d_they_know

http://michellemalkin.com/2009/0
3/18/the-kabuki-theater-of-aig-outrage/

Obama: Fire Geithner

Related:
 AIG Bonus Flap: Lawsuit to Get Back $165 M Could Cost $300 M or More

Obama White House Issues “Lamest” Confidence Statement Ever for Geithner

Amid AIG Furor, Dodd Tries to Undo Bonus Protections He and Geithner Put In

 Biden Off Mic: “Gimme a f*&$#ing break”

AIG Bonus Flap: Lawsuit to Get Back $165 M Could Cost $300 M or More

 Obama Dead Wrong On Stimulus, Caterpillar Company Jobs, Recovery

Obama, His Outrage in Legal, Political Quicksand Over AIG Bonuses?
.
Obama Wants To “Unclog Blocked Lending Arteries” — Here’s The Problem

 Finance, one of America’s great industries, being destroyed by Congress during crisis?

 Bankers Press Case Against Punitive Tax

 President, Treasury, Congress “undermining efforts to shore up the economy”

AIG Bonuses: Pure Distraction
http://axisofright.com/2009/0
3/18/aig-bonus-outrage-is-a-distraction/

http://porcupinerim.wordpres
s.com/2009/03/21/obama-spokesman/

Wall Street Mocked American Values

February 11, 2009

The announcement last week that Trader Monthly magazine was ceasing publication was one of those moments when a chance arrow of history scores a perfect bull’s eye on a deserving target. The current recession, brought on at least in part by Wall Street’s bonus lust, has claimed countless innocent victims. But in this case it has finally delivered a comeuppance to our era’s loudest, gaudiest, cockiest champion of Wall Street excess.

By Thomas Frank
The Wall Street Journal

Those who still single out former Merrill Lynch CEO John Thain as a symbol of extravagance should take note. Yes, the man once spent over a million dollars having his office remodeled and went on to arrange questionable bonuses for the year in which Merrill lost billions and sold itself to Bank of America.

Just a few years ago, however, the bonus cognoscenti at Trader Monthly depicted Mr. Thain as something of a piker. In an article that began with the sentence, “What, did somebody forget a zero?” they sneered at Mr. Thain’s “reported compensation,” which they claimed was $6 million for 2006, back when he was CEO of the New York Stock Exchange.

Read the rest:
http://online.wsj.com/article/SB123431293
649170767.html

Federal Government Takes Over American Life

February 10, 2009

Your doctor will have to do things the fed’s way.

Wall Street money makers can’t get big bonuses unless the fed agrees.

The Census will be run from the White House so that the party in power and the fed can redraw congressional districts.

Pork spending?  A leading lawmaker isn’t ashamed of his role because he says nobody cares.
Schumer Says Americans Don’t Care About Pork Spending

Which means he doesn’t care about us.

This sounds like a bad novel.  A nightmare.  Orwell’s 1984?

No. 

Obama’s 2009.

So now we know the answer to Senator Arlen Specter’s question “Why the rush?”

Specter says, “We have not followed regular congressional order on the stimulus….Now we need clarification on just where the government will meddle….”

Senator Chuck Grassley asked this week, “Aren’t we going to look before we leap?”

The answer is no.

This morning on the Fox News Channel it was obvious that neither Republicans or Democrats had the slightest idea of the line items in the stimulus.  And they vote today.

Our government is broken down …. and being hijacked….

Time’s up.  Barack says so.

Related:
http://michellemalkin.com/2009/02
/10/why-obama-wants-control-of-th
e-census/

Stimulus: Barack Ran the Clock; Pelosi Found the Pork; Media Got Amnesia

Stimulus Makes Sure Feds Watch Your Doctor’s Medical Solutions For You 

“Good” thrown after “bad” debt; But it’ll work; Wanna bet?

 Stimulus: A long way from the best it could possibly be

Obama Agenda Crystal Clear

 Obama, Dems Want It All and Socialism Now

Obama Really Against Executive Perks? Give Up Air Force One

February 5, 2009

Even Donald Trump agrees with President Obama “100%” that there should be limits on executive pay and bonuses.

Tom Daschle gave new meaning to the term “Limousine Liberal.”

Now maybe we should have a government moritorioum on all those who turn in their excessive executive perks and goodies — their overpayments and bonuses by the tax deadline on April 15, 2009.

Maybe President Obama should give up his cool executive jet or his new limo, “The Beast.”

Air Force One over Mt. Rushmore.jpg

Here’s how Scott Mayerowitz of ABC sees this…. 

America’s CEOs are coming under fire these days not just for their hefty salaries but also for their use of private jets, limos with drivers and free trips to posh resorts.
But they aren’t alone in living this lavish lifestyle — the president of United States gets all these perks and more.

And unlike some of his Cabinet appointments, he doesn’t have to pay taxes on these benefits.

It might be a bit of a stretch to compare today’s corporate titans with the commander in chief, but some Wall Street bloggers clearly upset with President Obama’s attempts to rein in executive pay are doing just that.

“Some accountability needs to be put in place. We won’t have them kicking sand in the face of taxpayers any longer,” said one private equity worker on Dealbreaker.com, a Wall Street gossip site and blog.
 

Above: Donald Trump holds a driver. Photo: AP

Read the rest from ABC:
http://abcnews.go.com/Business/CEOProfi
les/Story?id=6806414&page=1

Related:
Freedom Watch Says Obama’s Promise of Transparency Really Only Partial Promise, Partial Transparency — “Worse Than Bush”
.
White House Man Most Responsible For Air Force One Scare of NY Resigns; Investigation Ongoing, Photo Released
.
Obama White House “Dysfunction”

In this photograph released by the White House, Air Force One ...

In this photograph released by the White House, Air Force One flies over the Statue of Liberty in New York, April 27, 2009.

(AP Photo/The White House)

Obama ‘Absolutely Right’ on Executive Pay; NY Mogul Needs No Pay At All

February 5, 2009

The good news is that Donald Trump agrees 100% with President Obama’s idea to limit executive pay and bonuses.

Obama 
Associated Press

At the same time, Trump is doing what Trump loves to do: he is making millions by taking advantage of the situation.

Trump may save about $600 million on the cost of a golf resort planned for northeast Scotland as a result of the pound’s collapse against the dollar and as builders cut prices.

The rich keep getting richer.

Trump, like many in the big money club, would gladly work for no pay.  They make money the old fashioned way….

Related:
CNN:
http://www.nydailynews.com/money/2009/0
2/05/2009-02-05_and_the_rich_keep_gettin
g_richer_trump_s.html

New York Daily News:
http://www.nydailynews.com/money/2009
/02/05/2009-02-05_and_the_rich_kee
p_getting_richer_trump_s.html

 

Donald Trump holds a driver. Photo: AP

Obama administration to issue executive pay limits

February 4, 2009

The Obama administration plans to limit pay to $500,000 a year for executives of government-assisted financial institutions in a new get-tough approach to bankers and Wall Street, a senior administration official said Tuesday.

Obama plans to announce the new limits with Treasury Secretary Timothy Geithner at the White House on Wednesday.

By Jim Kuhnhenn, Associated Press Writer

“If the taxpayers are helping you, then you’ve got certain responsibilities to not be living high on the hog,” President Barack Obama said in an interview with “NBC Nightly News“.

An administration official familiar with the new restrictions said the most restrictive limits would apply only to struggling large firms that receive “exceptional assistance” in the future. Healthy banks that receive government infusions of capital would have more leeway.

Read the rest:
http://news.yahoo.com/s/ap/20090204/
ap_on_go_co/bailout_executive_pay

Obama’s HHS Secretary Nominee Daschle Faces Tax Questions

January 31, 2009

ABC News has learned that the nomination of former Senator Majority Leader Tom Daschle, D-S.D., to be President Obama’s secretary of health and human services has hit a traffic snarl on its way through the Senate Finance Committee.

By Jake Tapper
ABC News

The controversy deals with a car and driver lent to Daschle by a wealthy Democratic friend — a chauffeur service the former senator used for years without declaring it on his taxes.

It remains an open question as to whether this is a “speed bump,” as a Democratic Senate ally of Daschle put it, or something more damaging.

After being defeated in his 2004 re-election campaign to the Senate, Daschle in 2005 became a consultant and chairman of the executive advisory board at InterMedia Advisors.

Based in New York City, InterMedia Advisors is a private equity firm founded in part by longtime Daschle friend and Democratic fundraiser Leo Hindery, the former president of the YES network (the New York Yankees’ and New Jersey Devils’ cable television channel).

That same year he began his professional relationship with InterMedia, Daschle began using the services of Hindery’s car and driver.

Thomas A. Daschle was picked to head Health and Human Services.

Thomas A. Daschle was picked to head Health and Human Services. (By Mark Wilson — Getty Images)

The Cadillac and driver were never part of Daschle’s official compensation package at InterMedia, but Mr. Daschle — who as Senate majority leader enjoyed the use of a car and driver at taxpayer expense — didn’t declare their services on his income taxes, as tax laws require.

During the vetting process to become HHS secretary, Daschle corrected the tax violation, voluntarily paying $101,943 in back taxes plus interest, working with his accountant to amend his tax returns for 2005 through 2007.

(Daschle reimbursed the IRS $31,462 in taxes and interest for tax year 2005; $35,546 for 2006; and $34,935 for 2007, a Daschle spokesperson said, adding that Daschle had asked his accountant to look into the tax implications of the car and driver five months before Obama won the presidency.)

The Daschle spokesperson told ABC News that the senator, facing questions from the committee, has said “he deeply regretted his mistake. When he realized it was a mistake he corrected it rapidly.”

Read the rest:
http://blogs.abcnews.com/politicalpunch
/2009/01/bumps-in-the-ro.html

The Washington Post said:

Daschle, a former Senate majority leader, and his accountant discovered the error regarding the luxury car service and reported it to the committee after his vetting was completed.

According to the Senate committee, Daschle used the car 80 percent of the time for personal purposes. That service was worth more than $255,000 in unreported income, according to the committee report.

http://www.washingtonpost.com/wp-dyn/c
ontent/article/2009/01/30/AR2009013
003793.html?hpid=topnews

Related at CNN:
http://edition.cnn.com/2009/POLITIC
S/01/30/daschle.taxes/index.html