Thursday, July 30, 2009

Something Stinks

Huffington Post


Something isn't right when bank executives take from taxpayers billions of dollars and give to themselves billions of dollars while millions are out of work, losing their homes, going to bed hungry, afraid of getting sick without health insurance. Do these people have no shame? Are they still tone-deaf? Do we REALLY need regulations to keep this from happening?

BankBonus TARP in Billions US$
JPMorgan Chase8.6925
Goldman Sachs4.8210
Morgan Stanley4.4710
Merill Lynch3.6010
Bank of A3.3045
Wells Fargo0.9825
Bank of NY Mellon0.953
Top 832.10173

That's almost 20% of the bailout money was used to give themselves a bonus, for making the biggest mess of the financial system in a century. Something stinks in the boardrooms of these banks. It's called shameless greed.


Today, New York state Attorney General Andrew Cuomo released a detailed report on last year's bonus season for bailed-out banks. Called "NO RHYME OR REASON: The Heads I Win, Tails You Lose I Bank Bonus Culture," the not-so-subtly titled report illustrates exactly how much each TARP bank paid out last year, how much they earned or lost, and how much TARP money they received. We should warn you, its not pretty.

Some of the numbers can be misleading. For example, the average bonus figures are somewhat skewed by the number and type of employees a particular bank has. For example, Bank of America has retail bank operations - and a lot of employees who aren't bonus-eligible. Goldman Sachs, for its part, has far fewer employees.

Yet, when you examine all of the numbers in one place, the figures are staggering. Though some banks posted profits last year, many lost billions -- and those particular billion-dollar bonus pools seem all the more extravagant now.

Below, we've compiled some numbers from the Cuomo report. Admittedly, our analysis is rather crude. We've included numbers from each bank's total TARP bill, its 2008 earnings (or losses) and its total bonus pool.

Which bailed-out banks doled out the best pay packages, despite the near-collapse of our economy? Which bonus pools were the most egregious? (NOTE: some of the bonus pools include a mix of cash and equity).

JPMorgan Chase, $8.69B Bonus Pool
JPMorgan got $25 billion from the TARP program, and earned $5.6 billion in 2008. 29 employees got bonuses of $8 million or more.

Citigroup, $5.33B Bonus Pool
Citi got $45 billion in government funds. Losses amounted to a staggering $27.7 billion last year. 13 individuals at Citi received bonuses of $8 million or more.

Goldman Sachs, $4.82B Bonus Pool
$10 billion in TARP money went to Goldman last year. The bank was still profitable, and managed to turn in earnings of $2.3 billion in 2008.

Morgan Stanley, $4.47B Bonus Pool
Morgan got $10 billion TARP infusion and actually showed earnings of $1.70 billion last year.

Merill Lynch, $3.6B Bonus Pool
After it was bought by Bank of America, Merrill received $10 billion in TARP funds. (The money was drawn down by BofA in January). Still, Merrill managed net losses of $27.6 billion in 2008.

Bank Of America: $3.3B Bonus Pool
BofA got a whopping $45 billion in TARP funds. 2008 earnings came in at $4 billion. The top four execs at BofA got a combined $64 million last year.

Wells Fargo, $977 Million Bonus Pool
Wells took on $25 billion in TARP funds. Losses last year, including Wachovia losses, were $42.9 billion. (It's worth noting that the senior execs at Wells Fargo didn't take bonuses last year)

Bank of New York Mellon, $945M Bonus Pool
BONY-Mellon received $3 billion in TARP money. Earnings last year were $1.4 billion. The bank's top five execs declined bonuses last year.

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