Especially when you're going to attack it by means of the tremendously stupid argument that banks had the bailout forced upon them and would have happily just continued day-to-day operations on their own in the fall of 2008....I wonder if ghettocheeze knows what federal bankruptcy judges do to executive salaries.....
I think employees will work hard to get their company out of debt, so they can receive bonuses again. Or, would you rather them lose their jobs because they bank is insolvent? DD
The problem is that you didn't read the entire policy - policies aren't summed up in a single sentence. There are two levels of companies - the ones that receive general bailout funds, and the ones that are rescued under exceptional circumstances, and this is only for companies that need this money in the future - not the ones that have gotten it so far. Exceptional circumstances are things like the AIG rescue, where the company is on the verge of disappearing. Yes, those executives get capped (though they can be paid higher than the cap in stock that they have to hold for a period of time) - that applies to somewhere between zero and a handful of companies, depending on what future blowups occur. For all the other banks that get TARP funds, these caps can be waived by a simple shareholder vote. This is simply a transparency measure. The idea is to make the compensation more public and create public pressure by the shareholders to eliminate the excessive compensation packages. But there's no actual cap - as long as the owners of the company agree, the executives can still be paid anything the company wants. As of today, after this rule is implemented, not a single entity has its executive pay capped. The only ones that will are companies that are in immediate danger of disappeared and need an extraordinary rescue specific to that entity.
I know what I read and heard myself this morning. Stop trying to play word games when you know it as well as everyone on Wall Street that Henry Paulson shoved this garbage to banks at gunpoint in order to keep the bad ones from going belly up. Once a Bank took TARP money willingly or through coercion, there is no going back. This compensation issue was brought by Kovacevich from Wells Fargo and others but was quickly hushed by Paulson who claimed it was for the benefit of the entire banking system. Look I am not trying to play devil's advocate for the Bankers. They could rot and die for all I care but to say banks had a choice in this matter to take the money or leave is completely false. Moving forward, the Banks even the good one like Wells Fargo and JP are in worse financial conditions than they were in October 2008. There is no way any bank will refuse more money when all off the now actually are in dire need of money. My point is that the hand of government creates more harm than good. This is a clear attempt by the government to control and soon take over the financial industry.
Of course they were forced to take the money - neither Wells Fargo or JP Morgan wanted it. The CEO's of both have publicly stated that. However, that's totally irrelevant to the compensation limits being discussed. The compensation issues are based on distribution of *future* TARP money - whatever has happened thus far is totally irrelevant to that. Wells Fargo and JP Morgan are still healthy companies. And that said, even if they do take money, that does not put any compensation limits in place. Just a simple shareholder vote.
Wow I get it now. Back when the Republicans and Clinton deregulated banking, they predicted that greed would run rampant, bring down the banks, then they predicted that bush (who they knew would be president and a two termer) would with the help of Paulson come up with this TARP plan.
I would. That might actually help something in the long run. Let another bank come in that actually knew what the hell it was doing, buy up the assets, and be a good bank. Better 1 year of pain than 20 years of slow agonizing pain.
Banks that received TARP that are in good financial standing i.e. Wells Fargo & JPMorgan are exempt from this rule.
Tabling the fact that you don't understand the details of the plan and haven't read it and don't know much about it or about economics in general, the meat of your theory is now that well-known communist Republican Goldman Sachs CEO and Treasury Secretary Henry Paulson led this secret conspiratorial drive in conjunction with the undead spirit of Karl Marx in order to engineer a collectivization of the financial sector. Dee dee doo dee doo dee doo doo doo dee doo dee doo dee doo doo doo doo dee doo doo doo dee doo doo doo doo doo doo doo doo doo doo doo doo
Major, I understand your point and completely agree. However, I have been publicly calling out the government for the last 4 months of playing with private business and free market. Paulson's defense for making every bank take TARP money is a lie. I am a supporter of free market forces which dictate that a bad business should go bankrupt or be bought out if it comes to the point of failure. This one-for-all all-for-one crap pushed by Paulson was interference in free market system. If some banks fail then so be it, others will take their place or in the case of Wamu and Wachovia, they will be consolidated with the strong. That is true free market and it requires that you let the system work its own remedy but Henry Paulson decided to grab his bazooka and play Rambo with the financial system. This type of intrusion by the government is destructive and will kill competitive nature in an industry when everyone has the same lender of last resort - the US Treasury. Perhaps you will understand my view the day the entire banking industry is nationalized when all the bailouts fail to save the dead zombie banks.
They weren't forced. Ford's CEO is saying that they neither want or need aid. He is not being fully honest. He wants to project that Ford is in better shape than it is, and that is more viable than GM. Their stock went up afterwards. These CEOs are smart. Public image means a lot for their stock price. I think they wanted it, but denied wanting it, to support their company's stock. Then they accepted it when they were asked to take it.
Fair enough - my main contention was simply about the wage requirements and the misunderstandings there, not so much the appropriateness of the TARP.
My understanding is that there was a contentious White House weekend meeting where some of the CEOs (WFC, JPM) didn't want the money and were basically forced into it by the Treasury. Remember, this isn't free money - it dilutes ownership and they have to pay dividends on those shares. So they have to make a decent return on that money to make it worth it. But I don't know what really happened on the inside. Ford is a bit different - they stated they wanted the line of credit but supposedly have no intention of drawing it down unless circumstances change (unlike GM/Chrysler, which actually took the cash immediately). So we'll eventually know on Ford - if they don't touch the money, they were telling the truth. If they do, we know they ultimately needed it.
The usual SammyFisher spins, how cute. What Sammy failed to mention (or more likely, didn't understand) is how preferred shares differ from common equity, like, you know, how the shares the good ole USA got carry almost NO VOTING RIGHT. But that's not how he'll present it. He'll present those preferred shares are the same as common shares. 7.5% preferred = 7.5% common. And yes, of course, a shareholder can propose a proxy to bring forth a vote, but that's not what the government did now is it? Finally his argument that a shareholder can single handed force a company to change its executive compensation is bullsh1t (unless it's majority one). Not surprisingly.
And what a dumb MF like you doesn't understand is that when the federal government (or anybody) pumps 45b of equity into a company to keep it from becoming bankrupt it pretty much becomes the majority shareholder regardless of the underlying capital structure. (not to mention that in many cases, their loans were CONDITIONAL on having a say in management of the company, I know this for a fact with regarding AIG, I haven't looked over the Citi papers but I assume their the same). Look, this idiot's argument was that the "owners" of the company should be able to pay the company. For better or worse, the government now owns both Citi and AIG regardless of the way the voting structure is.
Interesting So in essence. . this is an Economic 9/11? you know. . .where bush and them used fear to push through a bunch of laws and crap that would never have passed otherwise???? [Patriot Act] Anyway What i find interesting is when poor people get money from the government. . . people are ready to direct them on how it is spend and to sterilize/prohibit them from having more kids basically take control of most of their lives but Feel any regulation of RICH folx getting money from the government is a crime against Nature The hypocracy Smell the Aroma Rocket River
yes exactly like that! Or like the guns being confiscated in NOLA. You have public support for doing crazy things because of fear.
