Bank Pay at Bailed-Out Banks Slashed by Half
October 22, 2009
Pay for top executives at bailed-out banks and financial institutions, including Bank of America, Citigroup, and GMAC, has been cut in half by the Treasury's compensation regulator, Kenneth Feinberg.
Banks that have already paid back bail-out funds, including JPMorgan and Goldman Sachs, will not be affected by the Treasury's orders.
Headline Not the Whole Story Here
How to restructure the banking system so that nothing like what happened in September of 2008 ever happens again is an ongoing debate. Frequently, the discussion is more political than practical.
This is unfortunate because the best outcome for everyone, especially individuals holding money in conservative investments such as money market accounts and CDs, is that safe deposit accounts are actually safe.
Within Feinberg's orders, and to that point, is the idea that top bank executive pay should be linked to long-term performance.
For example, new AIG CEO Robert Benmosche would be allowed to receive up to $7 million in yearly pay, but $3 million of that would be stock that could not be sold within five years.
The Best Bank Rates and the Best Banks
The next few years, it seems, will see considerable separation between banks who can compete in this new, government-intensive, public relations-dependent environment, and those who can't.
If you're looking for the best CD rates and the best money market rates, then, you are wise to stick with banks that unequivocally value the trust (and the money) you put in them.
BANKMODE.com
22 October 2009 at 11:41 am
Not only that, Bank of America sold First Republic Bank to a private equity group. Which gives them an extra $1 billion!
Apparently they obtained First Republic when they took over Merrill Lynch. Merrill Lynch paid $1.8 billion for them. In conclusion, Bank of America keeps a $2 billion of their assets while the private equity groups gets $12 billion.
Nice! Read about it at http://latimesblogs.latimes.com/money_co/2009/10/bofa-expected-to-sell-first-republic-bank-to-privateequity-group.html