So, you know that that protest that is starting at Goldman Sachs and then marching around the financial district? It really has AIG shaken up. Our friends at DealBreaker have obtained a memo in which AIG warns employees to batten down the hatches, close the blinds and bar the door.
The bill to levy a 90 per cent tax on bonuses at bailed out firms was overwhelmingly approved by Congress today. The measure, drafted hastily yesterday, got little public discussion and few people have actually seen the text of the bill.
If you haven’t been following the AIG story as closely as we have, and you’re unsure of how the firm managed to find itself in such a mess, our own John Carney has written the best account of it over at The American Conservative. Do check it out:
If the 90% retroactive tax rate on bonuses passes, Obama has to veto it. Otherwise he’s a hypocrite.
Outraged over the fact that the “AIG (AIG) bailout” was just a backroom deal to prop up Goldman Sachs (GS)? Now’s your chance to let the world know, and we’re not just talking about letting the world know in the comments section of Clusterstock.
So Congress is set to vote in a stunning, 90% tax rate on bonuses paid out to TARP firms. The logic: If you screw up the economy, no windfall for you.
Congress is set to vote today on a plan to impose a 90 per cent tax on bonuses paid by any company getting more than $5 billion in federal bailout funds. The idea was sparked by the outrage over AIG bonuses but lawmakers decided to expand it to cover any […]
We’ll admit that we’ve been sceptical about the argument that AIG’s financial products teams need to be retained because they are the only people capable of understanding the credit default swaps safely hedged as they are well down. Are these things really so complex that AIG couldn’t hire some of […]
The incompetence of executives at AIG’s Financial Products group did not extend to the negotiation of their own bonus contracts:
A friend who used to work at a major Wall Street investment bank writes in to say we’re wrong on the AIG bonus issue. While he hasn’t convinced us, we think he makes some powerful arguments and wanted to share them with you.
The New York state judge overseeing the fight over bonuses between Attorney General Andrew Cuomo and Bank of America ruled on this afternoon that the names of executives who received 2008 bonuses at Merrill Lynch are not a trade secret and could be made public.
AIG doesn’t want you to know the names of the executives in its Financial Products division who got huge bonuses paid for with taxpayer bailout bucks. But we don’t care what AIG thinks. We think you should know.
AIG may not want to reveal the names of its biggest bonus recepients in the Financial Products group, but it was really only a matter of time before the names came out. The New York post revealed three names this morning–James Haas, Douglas Poling, and Jonathan Liebergall. All three declined […]
Edward Liddy, the chief of AIG, will be delivering this testimony to Congress today. It runs 53 pages. We read it–well, we skimmed it–so you don’t have to. The highlights:
Tim Geithner is now completely on the defensive. In a long letter to Nancy Pelosi, he explained how and why he approved the AIG bonuses (troubling) and described a plan to “recoup” them. The letter will not likely stop the growing chorus of criticism that may well drive Geithner out […]
Andrew Cuomo is on the AIG bonus case. And he’s loving it.
When Senator Chuck Grassley said AIG executives should “resign or go commit suicide,” he didn’t really mean it that way.
This was bound to happen. And it just shows the absurdity of the U.S. government micromanaging private companies.
What? Here we thought Vikram Pandit basically got no pay in 2008, dutifully falling on his sword while the shareholders suffers for the sins of prior CEOs.
The practice of using taxpayer dollars to trap top financial talent inside of zombie banks continues despite the public outrage and political backlash. It seems banks will stop at nothing to make sure that they capture as much of the bailout dollars for the personal benefit of their employees.
A Wall Street guessing game has grown up around the mystery of why Bank of America is fighting so hard against revealing the names of the recepients of the billions in bonuses Merrill Lynch gave out shortly before the merger on December 31st. Since the bonuses were made before the […]
Still no word on whether Bank of America (BAC) will be forced to reveal the names of the Merrill Lynch employees who got big bonuses right before the company’s sale, and its gigantic Q4 launch.
Like his predecessor Eliot Spitzer, New York AG Andrew Cuomo is trying to build political capital by riding the populist anger at Wall Street. And of course, executive pay and bonuses are easy things to target.
It looks like Andrew Cuomo finally found Eliot Spitzer’s playbook in the desk drawer of the Attorney General’s office. After weeks of investigation and speculation that it might all amount to nothing, Cuomo has come out swinging. From the Wall Street Journal:
Despite all the attention the press has paid to the fight between New York Attorney General Andrew Cuomo’s office and Bank of America over Cuomo’s attempt to despose executives over the billions bonuses paid and losses made, the focus of the investigation is not the big bank based in Charlotte. […]
Former Clinton Administration staffer Matt Miller wrote Bill Lerach in prison and got a letter back outlining how the convicted class-action agitator would sue the banks to recover bonus loot. And as a bonus to Obama, he’d do it for free.
Even if the economy stabilizes a little, it’s really hard to see how New York is going to solve its budget woes, given the collapse of Wall Street, big media and real estate. A combination of a bad economy, lower public services and higher taxes could make the city toxic […]
On CNBC Reports on Friday, post-Kudlow, we did a short segment on the future of Wall Street and how smaller firms are well-positioned to take advantage of the financial meltdown. Boutiques such as Evercore, Lazard and Greenhill are in a nice spot, but there’s no denying that big corporate clients […]
Here’s another disturbing indicator of a coming cliff-dive in the New York real estate market. Buyers are getting so nervous that they’re leaving huge deposits on the table just so they can get out of new purchases. We’re not talking $100,000 or $200,000 deposits either
We wanted to highlight some of the excellent comments from our ongoing discussion about the future of Manhattan real estate, an issue that really affects the whole country given how much wealth is tied up here.
Yesterday we posted a straightfoward chart plotting Manhattan apartment prices against Wall Street bonuses, a vivid picture of how the two marched together. Now, of course, bonuses are falling off a cliff. A Manhattan real estate insider passes along more info from the ground, showing the unsold inventory is soaring. […]
In our discussion on the national housing market, a reader sent us this wonderful chart of Manhattan condo prices vs. Wall St. bonuses. It sure looks scary. Sure, in 2001-2002, prices kept on rising, even as bonuses fell, but that’s when the Feds turns on the national money spigot and […]
Now that brokers are the only working revenue sources for Wall Street, they’re in high demand.
2008 sucked, but Wall Street still paid out $18.4 billion in bonuses last year. Except only it was more. WSJ’s indespensible Number’s Guy Carl Bialik has a good piece on how these numbers are calculated (poorly) and why the initial figures tend to underestate the final amount:
If the Swiss thought their system of secret banking took a serious blow this morning when UBS agreed to hand over the names of a few hundred US clients, they ain’t seen nothing yet. Today US prosecutors filed a law suit seeking the identities of tens of thousands of US […]
As we mentioned this morning, UBS surprisingly capitulated yesterday to the demands of US prosecutors to release the names and account numbers of clients, breaking the centuries long tradition of Swiss banking secrecy. But what may be even more surprising is how small the fines UBS agree to pay. And […]
The NYT helpfully reminds us today that Wall Street employees aren’t the only people in America who get bonuses. In a range of industry, the end-of-year performance award can be a significant part of one’s compensation. Even teachers and middle-range tech guys.
UBS AG, Switzerland’s largest bank, will pay $780 million and disclose the names of some secret account holders to avoid U.S. prosecution on a charge that it helped thousands of wealthy Americans evade tax
The CEO of General Electric is giving up his annual bonus and performance awards totalling $12 million.
There’s a specter haunting the stimulus bill: the specter of pay caps. The nightmare scenario envisioned by many is that the pay caps included in the stimulus bill Barack Obama is scheduled to sign into law any minute now will amount to a war on talent, driving the best and […]
This morning we ran Lucian Bebchuck’s case against the new limits on compensation at financial firms that take bailout bucks. Bebchuck makes a persuasive case that the new limits foisted on Obama’s stimulus bill will be both unfair and counter-productive: they may actually convince bankers to risk their firms by […]
Of course it is outrageous for bankers, brokers and traders to claim enormous bonuses while their companies operate on taxpayer life support. But working out the right way to limit Wall Street pay is important. It’s a lesson we’ve learned again and again through our economic crisis: it’s not enough […]
If there’s chagrin on Wall Street about the TARP bonus limits tucked into the stimulus, here’s a chart that should at least help bankers understand where the country’s anger is coming from.
Obama is set to announce a program to help out homeowners on the brink of foreclosure. JPMorgan (JPM) just announced that it’s suspending foreclosures for three weeks. Citigroup is also making noises about doing the same.
Bank of America (BAC) has reversed course on a controversial decision to delay paying bonuses to its i-bank employees for several years until the financial crisis is over. This obviously went down horribly internally as a) people don’t like not getting paid and b) many Merrill Lynch employees made out […]
This kind of analysis is always a little silly, though you do have to wonder whether these highly paid banking CEOs had something better to be doing on the shareholder’s (and taxpayer’s) dime than sitting in front of a bunch of know-nothing Congressional blowhards.
Dennis Moore, a Representative from Kansas asked the CEOs of all the banks, “How much taxpayer money did you get and how much salary did you get in 2008?” We have the clip below of all the CEOs droning out their response. Nobody got a bonus.
The pitchfork crowd may be pleased with the new pay caps on companies taking exceptional assistance from the government, but as WSJ’s Jason Zweig, there’s a little something called the law of unintended consequences that may make us regret or our desire for justice.
UBS (UBS) is getting medieval with its compensation for top managers, according to CNBC. The bank will give no bonuses this year, and future bonuses will be subject to a severe clawback. If the company reports a loss in any of three years following the bonus, the employees lose the […]
Wall Street banks paid out $18.4 billion in bonuses for 2008 to New York City employees, a 44% dip from the $32.9 billion doled out in 2007, according to New York state comptroller Thomas Napoli. These bonuses, of course, were paid for by US taxpayers, whose TARP money helped keep […]
Thanks to increased digital revenues, Warner Music Group was able to give its CEO Edgar Bronfman and his second-in-command Lyor Cohen $3 million bonuses in 2008, according to WMG’s recent proxy filing.
To retain top brokers, Morgan Stanley (MS) and Citigroup (C) have agreed to set aside $3 billion in bonus cash for their combined brokerage JV.
It’s a problem from Hell. Taxpayer funds have been promised to support banks around the world in hopes that the banks will make loans that will ameliorate the global economic depression. But taxpayers are understandably outraged when bank executives receive huge bonuses and salaries that, in the last analysis, are […]
Investment banker Peter Kraus, formerly of both Merrill Lynch and Goldman Sachs, shocked Wall Street a couple of weeks ago when he ditched his new employer, Merrill, after three mere months of employment. But he got a nice check for his time: $25 million. No word how much the new […]
Investment bankers discover what it means to work for a solid commercial bank.
We’re shocked that nobody has suggested this before, but on its face this looks like a great idea… Credit Suisse announced today that bonuses for its top executives would be made in illiquid, mortgage-backed securities. Seeing as these guys are responsible for getting this stuff on the companies books, it […]
John Thain won’t be getting any bonus this year.
Well this probably makes it harder for Merrill’s John Thain and any other executive hoping to get a big bonus this year…
Why did it take so long for Citi (C) execs to arrive at this no brainer? FT reports that key execs, as well as Bob Rubin, are willing to give up their bonuses for this year. This should have been announced ages ago. They could’ve done so when they had […]
Given the wreckage, this doesn’t sound too bad for Merrill Lynch (MER) folks. Bloomberg reports that bonuses will likely go down about 50% this year:
And finally we’ve got some non-Citigroup Is Burning news to share. AXA financial, the US arm of the global financial conglomerate, is eliminating bonuses this year and reducing salaries by 20% in 2009, according to a source familiar with the memo. We’re not sure how widespread these cuts are at […]
First they have an indicted head of private wealth management and now bonus drama. And you think the Swiss are boring!
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