Stimulus bill does clawback of pay

iVillage Member
Registered: 02-19-2008
Stimulus bill does clawback of pay
6
Sat, 02-14-2009 - 3:13pm

The newly passed stimulus package does retroactive clawback on executive compensation for any bank which has received federal funds.

http://latimesblogs.latimes.com/money_co/2009/02/bank-pay-execut.html

Late fix in stimulus bill imposes tighter limits on bank pay

The economic stimulus bill passed by the Senate on Friday includes curbs on executive pay that go well beyond what Wall Street had been expecting.

Sen. Christopher Dodd (D-Conn.), the chairman of the Senate Banking Committee, slipped the provisions into the bill late in the process. The entire stimulus package now heads to President Obama for his signature.

From the Washington Post:

The bill limits bonuses for executives at all financial institutions receiving government funds to no more than a third of their annual compensation. The bonuses must be paid in company stock that can be redeemed only when the government investment has been repaid.

Unlike compensation rules the White House had previously issued for executives of companies getting additional government capital, Dodd made his measure retroactive, the Post said:

The limits in the stimulus bill would apply to top executives and the highest-paid employees at all 359 banks that have already received government aid.

"This is a big deal. This is a problem," said Scott Talbott, chief lobbyist for the nation's largest financial services firms. "It undermines the current incentive structure."

Talbott said banking executives expected certain restrictions would be applied to them but are concerned that some of the most highly paid employees, such as top traders, who bring in hefty sums for the company, would flee to hedge funds or foreign banks that have not accepted U.S. government funds.

Dodd’s move could backfire if it fuels another exodus of investors from battered bank stocks, which could weaken the institutions and force some to appeal for new government help.

The KBW index of 24 major bank shares plunged 14% this week to close at 26.11 on Friday, just above the 14-year low of 25.34 reached on Jan. 20. The index has dived 41% this year.

In a statement, Dodd said he was "delighted that my amendment to impose tough new limits on huge bonuses for executives working in firms that receive taxpayer funds will be included in the final economic recovery bill.

"The decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence in efforts to stabilize the economy. American taxpayers deserve better. With vigorous oversight by the Treasury Department and by Congress, these tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses.”

iVillage Member
Registered: 01-14-2008
Sat, 02-14-2009 - 7:51pm

The Democrats just spent 787 Billion of our tax dollars, have they "volunteered" to cut their own pay or perks?

iVillage Member
Registered: 08-30-2002
Sat, 02-14-2009 - 11:34pm

**I will pay several thousand dollars in taxes this year and I would much rather have a choice so I could give it to a bank CEO rather than have to give it to this government so they can use it against me.**


I consider a year we pay only several thousands of dollars in taxes a good year, compared to the years I paid tens of thousands of dollars in taxes because I was single, childless and had no real deductions and all my quarterly bonuses were taxed at 50% on top of the 27% I paid on my salary. But I like having roads to drive on, hospitals that have ER's open 24/7, police/fire departments available by simply dialing 911



iVillage Member
Registered: 01-22-2009
Sat, 02-14-2009 - 11:42pm

~I wonder how many jobs saving the March Mouse for N

Avatar for claddagh49
iVillage Member
Registered: 07-20-2004
Sun, 02-15-2009 - 9:46am
I agree. Nobody likes to pay taxes, nobody, but it is and always will be a part of life. There are only two sure things in life--- Death and Taxes--- not necessiarly in that order,LOL.
iVillage Member
Registered: 03-23-2003
Sun, 02-15-2009 - 12:56pm

I wonder how many jobs saving the March Mouse for N


iVillage Member
Registered: 03-18-2000
Mon, 02-16-2009 - 11:19am

"I wonder how many jobs saving the March Mouse for N

 


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