WASHINGTON (Reuters) – The U.S. pay czar on Thursday slashed compensation for top earners at seven bailed-out companies for the final two months of the year, and was immediately slammed by the country’s largest bank which claimed the cuts could send talent fleeing.
Many of the firms, which have together received more than $300 billion in taxpayer aid, issued conciliatory statements, but Bank of America said the ruling would put it at a disadvantage in competing with companies not under the pay czar’s thumb.
“People want to work here, but they want to be paid fairly,” said BofA spokesman Scott Silvestri.
Pay czar Kenneth Feinberg said competitive concerns and public outrage both played a role in how he reworked pay contracts for the 25 highest-paid employees at the five financial firms and two automakers who are the biggest recipients of government aid. He said their cash compensation rates for the remainder of 2009 would drop 90 percent compared to 2008. Their overall compensation rates for those two months would on average be cut in half. But he added he will not claw back payments already made. “I’m not going to go back and ask everybody to repay what they’ve already earned,” Feinberg said.
The companies affected are American International Group Inc, Bank of America Corp, Citigroup Inc, General Motors Co, Chrysler, GMAC and Chrysler Financial.
U.S. officials have said Wall Street pay practices must be reformed to rein the excessive risk-taking that fueled the crisis that pushed the financial system to the brink of collapse last year.
Huge pay packages for banks and other financial firms have ignited public anger at a time the U.S. unemployment rate is at a 26-year high and seen climbing.
If they were so damned talented…maybe we wouldn’t be in this mess. I say they can all resign, go out and work for a living like the rest of us.
28,
thats WHY the USA needs to make and FORCE a standard business model and practice.
Think about it..
Other countries bring cars to the USA and sell at REASONABLE prices, but the owner/CEO doesnt get anymore pay..
WE sell to other nations, and our owner/CEO get paid 100 times MORE..
Only persons getting SCREW’d is the people of the USA.
I hope you know that the IRS has NO WAY to track or trace most deductions that Corps make. They have no computer that can INTERLINK payments to companies..they cant even find many of these companies and BUSINESS tends to hide the STACKS of info in STACKS of info..
I love that picture.
It should now be used as the poster of Rush Limbaugh crying that we don’t have a white president any longer.
I never said that the Congress has not completely abdicated it’s duty. But absolving the bribing idiots who got the system rigged just as they liked and then promptly crashed into the ground deserve is a strange form of blindness. Besides, there have been trillions of dollars robbed out of our system for decades. Just before 9/11 Ol’ Rumsfeld admitted that the Pentagon had lost 2 trillion dollars or more over the past few years.
Continuing to see this through partisan eyes can only lead to more suffering. A catastrophe of robbery and greed on this scale is either not a point of political disagreement between the parties, or so far out of their knowledge and control so as to render them irrelevant.
Deserve? I type these things out fast, that must have been a Freudian slip.
It should have read
I never said that the Congress has not completely abdicated it’s duty. But absolving the bribing idiots who got the system rigged just as they liked and then promptly crashed it into the ground is a strange form of blindness
I’m so sick and tired of that old chestnut; “you need the high salaries to keep and attract the best and the brightest”
BS!! While Chase is claiming record profits after our tax money cleared their books, they’re jacking up my intrest rates to 31%.
Should have let them all go bankrupt!!!
#43 The same thing is happening to them that is happening to you. If you owe they own you.
Stop spending what you don’t have!
This so-called “Talent” was allowed, with no regulation, to gamble away most of the money on the planet on credit default swaps, etc, and they think they deserve more money? I think not!!!!
Duck you, BofA, eat spit and cry!
#14, Just wait until FedCare comes to be. The government gets access to every company’s books. How long do you think it will be before they start making “suggestions” to small business owners who happen to make “too much?”
#18, <i.And we’re in this trouble because we relaxed regulation on the big banks and they went and did stupid and greedy things… even Alan Greenspan admitted as much. And he has a libertarian leaning so for him to admit this is big.
In the 1960s, Greenspan wrote the following:
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
Later in 2004, when questioned on this, he said that it was possible to manipulate the value of the dollar so that it “appeared” to be based on gold or other commodities.
We saw how that worked out.
Mr. Greenspan said those things to save face after his actions while in office from 1987 to 2006 failed.
I wonder if he did what he did so it would come crumbling down to prove his point from the 60s about fiat currency.
#22, The housing bubble started collapsing in 2000. It was propped up by the Fed with low interest rates.
CRA and it’s ilk are what caused the housing bubble.
#25, Didn’t BofA’s CEO just retire? I guess he finally had enough of the BS.
44,
There is a RULE in this world that covers MONEY as well as DRUGS.
The drug dealer HAS TO GIVE drugs to the person with no money. If he does not want the COPS on him.
With money its almost the same. but Many of you have forgotten. If they dont DEAL WITH YOU, DONT PAY. But you MUST get your money OUT of the bank. ALSO, request to be AT THE HEARING of the court IF’ they take it to court(otherwise they go to court and you HAVE NO SAY).
THEN, if you can, FILE bankruptcy. If not, then dont STICK your money in the bank, unless you know its safe. In oregon, A company can take a Court order tot he bank and TAKE the money directly.
These companies havnt figured out that WE, do have power. its AS A GROUP. think of what would happen if 30,000,000 STOPPED paying/decline to pay the CC cards off. At an avg of $100 per person thats a $3,000,000,000 loss in 1 month.
Look up the reasons for BANKS to be in certain states, it VERY interesting.
Think about the NEXT month, IF’ the rest of the USA hears about this, and decides to QUIT paying. Even if another 10% of the USA(30,000,000) QUIT paying. THE BANK WILL DEAL with you or DIE.
Just as the drug dealer MUST give drugs to the idiot with no money, so that he dont call the cops. The money lender MUST DEAL with you, if you ACT as a group.
No one answered the question about Merrill Lynch?
BofA wanted out of the deal, and the government made them keep quiet about how bad MerrillLynch was financially.