Saturday, October 24, 2009

Real Czars of Genius

So tell me if you didn't see this one coming down Pennsylvania Avenue:

Even before the Obama administration formally tightened executive compensation at bailed-out companies, the prospect of pay cuts had led some top employees to depart.

And now that Kenneth Feinberg has broke out the terrible swift sword, how does it look?

At Bank of America, for instance, only 14 of the 25 highly paid executives remained by the time Feinberg announced his decision. Under his plan, compensation for the most highly paid employees at the bank would be a maximum of $9.9 million. The bank had sought permission to pay as much as $21 million, according to Treasury Department documents.

At American International Group, only 13 people of the top 25 were still on hand for Feinberg's decision.

So much of the senior leadership of these firms leaves. And the government wants the firms to pay the TARP money back, even though they've made it more difficult by chasing away the people who would be best-positioned to get the money back. Good plan!


The Moose said...

But the government has good intentions. That's what matters. And those execs who are leaving are just greedy. We are better off without them. With 10% unemployment, surely there is someone who would apply for their jobs.


Anonymous said...

To play devil's advocate, one could certainly make an argument that they are the same executives who's prior actions led to their demise.

Mr. D said...


One could make that argument if you limited it to the executive team at AIG that was responsible for the bad loans. But there's no evidence that was the case.

And in the case of B of A, where I used to work, the reason the bank is in financial trouble is because Henry Paulson and Ben Bernanke essentially jammed Merrill Lynch and its horrible balance sheet down B of A's throat. Meanwhile, who's going to run things? If you're a rising executive with B of A, would you want a job where some dude who's only accountable to Tim Geithner can dictate the terms of your compensation? Or would you rather go work for Wells Fargo, which doesn't labor under such strictures?

Cousin Dan 54915 said...

The way the government is treating the banks, I would suggest if you see canned goods on sale you buy them.