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Blatant Robbery Of Our Bailout $$ - Goldman Sachs Bonus & Kucinich Continues Investigation of Bail-Out Bonuses
Blatant Robbery Of Our Bailout $$ - Goldman Sachs Bonus
No I don't think we are enraged enough, at least that's what these bankers think
U.S
investment bank Goldman Sachs HQ which has set aside £7bn for bonuses and salaries this year
**************************************************************************
Goldman Sachs ready to hand out £7bn salary and bonus package
after its £6bn bail-out
**************************************************************************
UK Daily Mail
By Simon Duke
Last updated at 8:55 AM on 30th October 2008
http://www. dailymail. co. uk/news/worldnews/article-1081624/Goldma...
Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S.government for an emergency bail-out
The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday
Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million
The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S.government is throwing to Goldman as part of its £430billion bail-out
As Washington pours money into the bank, the cash will immediately be channelled to Goldman's already well-heeled employees
News of the firm's largesse will revive the anger over the 'rewards for failure' culture endemic in the world of high finance
The same bankers who have brought the global economy to its knees seem to pocketing the same kind of rewards they got during the boom years
Gordon Brown has vowed to crack down on the culture of greed in the City as part of his £500billion bail-out of the UK banking industry
But that won't affect the estimated 100 London partners working at Goldman Sachs's London headquarters
The firm - known as Golden Sacks for the bumper bonuses it pay its top bankers - is expected to cut the payouts by a third this year
However, profits are
falling much faster.Earnings have plunged 47 per cent so far this year amid the worst financial crisis since the Great Depression
This has wiped more than 50 per cent off the company's market value
More...Two million savers face poorer retirements after Standard Life slashes customer payouts
Cuts and tax rises to follow recession ... but only after election, hints Darling
FTSE closes 8
1% up in third best day of trading ever
Volkswagen shares halve after Porsche's '£12
6bn sting' costs bungling hedge funds billions
World's biggest airline created after Delta buys Northwest for £1
6bn
The news comes after it was revealed that even bankers working for collapsed Wall Street giant, Lehman Brothers, could receive huge payouts
Its 10,000 U.S. staff are expected to share a £1.5billion bonus pool.The payouts were agreed as part of the rescue takeover of Lehman's American arm by Barclays last month
The blockbuster handouts caused consternation among London employees of the firm, many of whom have now lost their jobs
Even workers at the nationalised Northern Rock will scoop bonuses worth up to £50million over the next three years
The extraordinary handouts include more than £400,000 for Rock's boss, Gary Hoffman, who is likely to become Britain's best-paid public sector worker
The majority of Northern Rock's 4,000 workers will receive four separate bonus payments - the first of
which will be made next March.Staff will get an extra 10 per cent on top of their basic salary
Lloyds TSB also intends to pay its employees bonuses despite taking a £5.5 billion emergency cash injection from the taxpayer
News of Goldman's bonus plan came as the firm promoted 92 of its bankers to partner level.A quarter are based in Fleet Street, London
Partnership is the holy grail of the investment banking world as the exclusive club shares around a fifth of the firm's total bonus pool
New York Attorney General Andrew Cuomo last night warned that Wall Street firms taking government-money risk breaking the law if they hand the cash straight back to employees
Cash-strapped workers are being penalised by pay rises which are far below the soaring cost of living, research reveals today
Despite inflation soaring to a 16-year-high of 5.2 per cent, the average worker got a pay rise of just 3.8 per cent in September
The research, from the pay specialists Incomes Data Services, highlights the financial problems facing millions of workers
Most of their household bills, particularly food and fuel, are rocketing by up to 35 per cent.However, their meagre pay rise does not begin to cover the extra cost
The majority of the 50 pay settlements investigated by IDS were in the private sector covering around 1.1million employees
They range from just 2 per cent for workers at the BBC to 5.3 per cent for workers at a firm of dockyard workers
Incomes Data Services warned pay rises are likely to fall even further over the coming year as inflation is expected to drop sharply
Economists predict inflation will fall below the Government's.
====================================================
Kucinich Continues Investigation of Bail-Out Bonuses
Requests Full Committee Resources to be Used
WASHINGTON, D.C. (October 28, 2008) -- Congressman Dennis Kucinich, Chairman of the Subcommittee on Domestic Policy is pressing his efforts to head off an avalanche of Wall Street bailout bonuses. Recent reports indicate bonuses and other compensation packages paid by financially troubled firms receiving government assistance could reach into the t More..ens of billions of dollars.
Today he released a letter sent to Congressman Henry Waxman, Chairman of the Committee on Oversight and Government Reform, asking that the Full Committee move quickly to investigate how bailout funds are being spent by the financial service companies participating in Treasury’s capital purchase program.
“It would be an affront to taxpayers and shareholders alike if Wall Street executives cashed in on the bailout. We must prevent the diverted directly or indirectly of bailout funds to bonuses and exorbitant compensation packages,” he said.
Congressman Kucinich, an opponent to the bailout, has been a leader in calling for stringent oversight on money spent through the bailout program. He asked for the leadership of the Full Committee to ensure that the resources necessary to investigate are available. The Subcommittee will remain a key part of the investigation.
Congressman Kucinich recommended that the Full Committee begin by requesting specific information from each of the 11 companies participating in the Treasury's Capital Purchase Program (Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, Morgan Stanley, Goldman Sachs, Merrill Lynch, Bank of New York Mellon, State Street, City National, and Key Bank). The information requested would include compensation data since 2003, descriptions of 'claw back' policies, an itemized list of funds received from government sources, A list of every party who has purchased more than $50 million of impaired assets in the past 24 months, and a description of each organizations risk management procedures.
"I believe that the American taxpayers who have provided this subsidy have legitimate concerns about how those companies will use those funds, what happened to require them to need those funds, and what they will be doing differently in the future to ensure that they will not need more assistance," wrote Kucinich in the letter.
The full text of the letter follows:
October 27, 2008
Henry A.Waxman, Chairman
Oversight and Government Reform Committee
2157 Rayburn HOB
Washington, DC 20515
Dear Henry:
I am writing to ask that the Full Committee move quickly to conduct oversight on the use of Federal monies by financial service companies participating in the Treasury’s Capital Purchase program. As you know, Treasury has set aside $250 billion for buying preferred equity in a number of national and regional financial institutions with funds authorized by the Emergency Economic Stabilization Act of 2008, passed recently by Congress.
While the ostensible purpose of these purchases is to increase lending by these institutions, it is not a requirement. Indeed, these companies are arguably free to spend these funds, or existing funds freed by the federal cash infusion, for any purpose, including payment of bonuses and extravagant compensation earned during the period preceding the bailout.
I believe that the American taxpayers who have provided this subsidy have legitimate concerns about how those companies will use those funds, what happened to require them to need those funds, and what they will be doing differently in the future to ensure that they will not need more assistance. Furthermore, this matter requires the urgent attention of the Committee, since the recipients of the federal monies can be expected to commit those funds immediately.
In view of the urgent nature of this matter, I will commit the resources of my subcommittee to follow the lead of the Full Committee in this investigation and assist in any way requested. I suggest that the Committee begin by requesting the following information from each of the 11 companies participating in Treasury’s Capital Purchase program (Bank of America; Citigroup; J.P.Morgan Chase; Wells Fargo; Morgan Stanley; Goldman, Sachs; Merrill Lynch; Bank of New York Mellon; State Street; City National, and Key Bank):
1. A breakdown of the total annual compensation paid since 2003 through the present, including plans to pay compensation and bonuses in the near future for performance prior to the capital purchase; to each employee whose total annual income exceeded $500,000. They should be asked to name the top five executives and break down their compensation packages. (They should include executive level employees who are no longer employed by the company). They should be asked to aggregate figures for the remaining individuals receiving over $500,000, by placing them into the following groups: over $1,000,000, between $750,000 and $999,999, and between $500,000 and $749,999. Total annual compensation should mean: salary, bonus, other compensation, the value of restricted stock awards, long-term incentive payouts and the value of stock option awards in the fiscal year. Other compensation includes perquisites and other personal benefits; amounts accrued pursuant to a termination or change in control plan; annual company contributions to vested and unvested pension plans; the dollar value of any insurance premiums paid by the company with respect to life insurance for the benefit of an employee; gross-ups or other reimbursements for taxes; and discounted securities purchases.
2. A description of any policies in place that dictate the circumstances in which the company will seek to recoup, “clawback”, compensation paid to employees in the event of a significant restatement of financial results or significant extraordinary write-off. If the company has entered into indemnification agreements or purchased insurance on behalf of certain employees to shield them from personal losses resulting from clawback obligations, they should be asked to explain the terms of such agreements or policies; limits, if any, on the amount that may be reimbursed to the company on behalf of the employment; the applicable standard of conduct that will override the agreement or insurance; and each individual who is covered by such agreements or insurance.
3. An itemized list of all government funds they have received since January 1, 2007 through Treasury programs. the anticipated benefit they expect to recognize as a result of the tax change enacted in Section 301 of the Emergency Economic Stabilization Act of 2008, participation in any Federal Reserve liquidity facility created after January 1, 2008, interest payments they have received from the Federal Reserve, and loans they have received to purchase assets from pooled investment vehicles under their control.
4. A list of the types of collateral they have pledged to each of these facilities and the value they received in exchange, if their institution has accessed any of the primary dealer credit facilities. They should indicate the aggregate value they have received each month in exchange for each type of collateral including treasury securities, agency securities, AAA-rated mortgage-backed, AAA-rated asset-backed securities, investment grade corporate securities, investment grade municipal securities, investment grade mortgage-backed securities, and investment grade asset-backed securities.
5. A list of every party who has purchased more than $50 million of impaired assets from their organization in the past 24 months and any financing they have provided.
6. An explanation of why the institutions participating in the Capital Purchase program need government aid. They should describe their business strategy going forward and how it differs from the strategy that has made it necessary for them to accept government aid.
7. A description of the organization’s risk management procedures before they received government aid and the improvements they have made in light of the consequences to their organization of the financial crisis.
This would be a logical extension of the recent oversight conducted by the Full Committee on executive compensation and key actors in the financial crisis.
Sincerely,
Dennis J.Kucinich
Chairman
Domestic Policy Subcommittee
Enclosure
cc: Darrell Issa
Ranking Minority Member
No I don't think we are enraged enough, at least that's what these bankers think
U.S
investment bank Goldman Sachs HQ which has set aside £7bn for bonuses and salaries this year
**************************************************************************
Goldman Sachs ready to hand out £7bn salary and bonus package
after its £6bn bail-out
**************************************************************************
UK Daily Mail
By Simon Duke
Last updated at 8:55 AM on 30th October 2008
http://www. dailymail. co. uk/news/worldnews/article-1081624/Goldma...
Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S.government for an emergency bail-out
The struggling Wall Street bank has set aside £7billion for salaries and 2008 year-end bonuses, it emerged yesterday
Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million
The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S.government is throwing to Goldman as part of its £430billion bail-out
As Washington pours money into the bank, the cash will immediately be channelled to Goldman's already well-heeled employees
News of the firm's largesse will revive the anger over the 'rewards for failure' culture endemic in the world of high finance
The same bankers who have brought the global economy to its knees seem to pocketing the same kind of rewards they got during the boom years
Gordon Brown has vowed to crack down on the culture of greed in the City as part of his £500billion bail-out of the UK banking industry
But that won't affect the estimated 100 London partners working at Goldman Sachs's London headquarters
The firm - known as Golden Sacks for the bumper bonuses it pay its top bankers - is expected to cut the payouts by a third this year
However, profits are
falling much faster.Earnings have plunged 47 per cent so far this year amid the worst financial crisis since the Great Depression
This has wiped more than 50 per cent off the company's market value
More...Two million savers face poorer retirements after Standard Life slashes customer payouts
Cuts and tax rises to follow recession ... but only after election, hints Darling
FTSE closes 8
1% up in third best day of trading ever
Volkswagen shares halve after Porsche's '£12
6bn sting' costs bungling hedge funds billions
World's biggest airline created after Delta buys Northwest for £1
6bn
The news comes after it was revealed that even bankers working for collapsed Wall Street giant, Lehman Brothers, could receive huge payouts
Its 10,000 U.S. staff are expected to share a £1.5billion bonus pool.The payouts were agreed as part of the rescue takeover of Lehman's American arm by Barclays last month
The blockbuster handouts caused consternation among London employees of the firm, many of whom have now lost their jobs
Even workers at the nationalised Northern Rock will scoop bonuses worth up to £50million over the next three years
The extraordinary handouts include more than £400,000 for Rock's boss, Gary Hoffman, who is likely to become Britain's best-paid public sector worker
The majority of Northern Rock's 4,000 workers will receive four separate bonus payments - the first of
which will be made next March.Staff will get an extra 10 per cent on top of their basic salary
Lloyds TSB also intends to pay its employees bonuses despite taking a £5.5 billion emergency cash injection from the taxpayer
News of Goldman's bonus plan came as the firm promoted 92 of its bankers to partner level.A quarter are based in Fleet Street, London
Partnership is the holy grail of the investment banking world as the exclusive club shares around a fifth of the firm's total bonus pool
New York Attorney General Andrew Cuomo last night warned that Wall Street firms taking government-money risk breaking the law if they hand the cash straight back to employees
Cash-strapped workers are being penalised by pay rises which are far below the soaring cost of living, research reveals today
Despite inflation soaring to a 16-year-high of 5.2 per cent, the average worker got a pay rise of just 3.8 per cent in September
The research, from the pay specialists Incomes Data Services, highlights the financial problems facing millions of workers
Most of their household bills, particularly food and fuel, are rocketing by up to 35 per cent.However, their meagre pay rise does not begin to cover the extra cost
The majority of the 50 pay settlements investigated by IDS were in the private sector covering around 1.1million employees
They range from just 2 per cent for workers at the BBC to 5.3 per cent for workers at a firm of dockyard workers
Incomes Data Services warned pay rises are likely to fall even further over the coming year as inflation is expected to drop sharply
Economists predict inflation will fall below the Government's.
====================================================
Kucinich Continues Investigation of Bail-Out Bonuses
Requests Full Committee Resources to be Used
WASHINGTON, D.C. (October 28, 2008) -- Congressman Dennis Kucinich, Chairman of the Subcommittee on Domestic Policy is pressing his efforts to head off an avalanche of Wall Street bailout bonuses. Recent reports indicate bonuses and other compensation packages paid by financially troubled firms receiving government assistance could reach into the t More..ens of billions of dollars.
Today he released a letter sent to Congressman Henry Waxman, Chairman of the Committee on Oversight and Government Reform, asking that the Full Committee move quickly to investigate how bailout funds are being spent by the financial service companies participating in Treasury’s capital purchase program.
“It would be an affront to taxpayers and shareholders alike if Wall Street executives cashed in on the bailout. We must prevent the diverted directly or indirectly of bailout funds to bonuses and exorbitant compensation packages,” he said.
Congressman Kucinich, an opponent to the bailout, has been a leader in calling for stringent oversight on money spent through the bailout program. He asked for the leadership of the Full Committee to ensure that the resources necessary to investigate are available. The Subcommittee will remain a key part of the investigation.
Congressman Kucinich recommended that the Full Committee begin by requesting specific information from each of the 11 companies participating in the Treasury's Capital Purchase Program (Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, Morgan Stanley, Goldman Sachs, Merrill Lynch, Bank of New York Mellon, State Street, City National, and Key Bank). The information requested would include compensation data since 2003, descriptions of 'claw back' policies, an itemized list of funds received from government sources, A list of every party who has purchased more than $50 million of impaired assets in the past 24 months, and a description of each organizations risk management procedures.
"I believe that the American taxpayers who have provided this subsidy have legitimate concerns about how those companies will use those funds, what happened to require them to need those funds, and what they will be doing differently in the future to ensure that they will not need more assistance," wrote Kucinich in the letter.
The full text of the letter follows:
October 27, 2008
Henry A.Waxman, Chairman
Oversight and Government Reform Committee
2157 Rayburn HOB
Washington, DC 20515
Dear Henry:
I am writing to ask that the Full Committee move quickly to conduct oversight on the use of Federal monies by financial service companies participating in the Treasury’s Capital Purchase program. As you know, Treasury has set aside $250 billion for buying preferred equity in a number of national and regional financial institutions with funds authorized by the Emergency Economic Stabilization Act of 2008, passed recently by Congress.
While the ostensible purpose of these purchases is to increase lending by these institutions, it is not a requirement. Indeed, these companies are arguably free to spend these funds, or existing funds freed by the federal cash infusion, for any purpose, including payment of bonuses and extravagant compensation earned during the period preceding the bailout.
I believe that the American taxpayers who have provided this subsidy have legitimate concerns about how those companies will use those funds, what happened to require them to need those funds, and what they will be doing differently in the future to ensure that they will not need more assistance. Furthermore, this matter requires the urgent attention of the Committee, since the recipients of the federal monies can be expected to commit those funds immediately.
In view of the urgent nature of this matter, I will commit the resources of my subcommittee to follow the lead of the Full Committee in this investigation and assist in any way requested. I suggest that the Committee begin by requesting the following information from each of the 11 companies participating in Treasury’s Capital Purchase program (Bank of America; Citigroup; J.P.Morgan Chase; Wells Fargo; Morgan Stanley; Goldman, Sachs; Merrill Lynch; Bank of New York Mellon; State Street; City National, and Key Bank):
1. A breakdown of the total annual compensation paid since 2003 through the present, including plans to pay compensation and bonuses in the near future for performance prior to the capital purchase; to each employee whose total annual income exceeded $500,000. They should be asked to name the top five executives and break down their compensation packages. (They should include executive level employees who are no longer employed by the company). They should be asked to aggregate figures for the remaining individuals receiving over $500,000, by placing them into the following groups: over $1,000,000, between $750,000 and $999,999, and between $500,000 and $749,999. Total annual compensation should mean: salary, bonus, other compensation, the value of restricted stock awards, long-term incentive payouts and the value of stock option awards in the fiscal year. Other compensation includes perquisites and other personal benefits; amounts accrued pursuant to a termination or change in control plan; annual company contributions to vested and unvested pension plans; the dollar value of any insurance premiums paid by the company with respect to life insurance for the benefit of an employee; gross-ups or other reimbursements for taxes; and discounted securities purchases.
2. A description of any policies in place that dictate the circumstances in which the company will seek to recoup, “clawback”, compensation paid to employees in the event of a significant restatement of financial results or significant extraordinary write-off. If the company has entered into indemnification agreements or purchased insurance on behalf of certain employees to shield them from personal losses resulting from clawback obligations, they should be asked to explain the terms of such agreements or policies; limits, if any, on the amount that may be reimbursed to the company on behalf of the employment; the applicable standard of conduct that will override the agreement or insurance; and each individual who is covered by such agreements or insurance.
3. An itemized list of all government funds they have received since January 1, 2007 through Treasury programs. the anticipated benefit they expect to recognize as a result of the tax change enacted in Section 301 of the Emergency Economic Stabilization Act of 2008, participation in any Federal Reserve liquidity facility created after January 1, 2008, interest payments they have received from the Federal Reserve, and loans they have received to purchase assets from pooled investment vehicles under their control.
4. A list of the types of collateral they have pledged to each of these facilities and the value they received in exchange, if their institution has accessed any of the primary dealer credit facilities. They should indicate the aggregate value they have received each month in exchange for each type of collateral including treasury securities, agency securities, AAA-rated mortgage-backed, AAA-rated asset-backed securities, investment grade corporate securities, investment grade municipal securities, investment grade mortgage-backed securities, and investment grade asset-backed securities.
5. A list of every party who has purchased more than $50 million of impaired assets from their organization in the past 24 months and any financing they have provided.
6. An explanation of why the institutions participating in the Capital Purchase program need government aid. They should describe their business strategy going forward and how it differs from the strategy that has made it necessary for them to accept government aid.
7. A description of the organization’s risk management procedures before they received government aid and the improvements they have made in light of the consequences to their organization of the financial crisis.
This would be a logical extension of the recent oversight conducted by the Full Committee on executive compensation and key actors in the financial crisis.
Sincerely,
Dennis J.Kucinich
Chairman
Domestic Policy Subcommittee
Enclosure
cc: Darrell Issa
Ranking Minority Member
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