Goldman Wants Out of TARP Trap

Goldman Sachs is eager to repay the $10 billion it received from the U.S. government under the troubled asset relief program, CFO David Viniar said Tuesday, according to reports.
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Goldman Sachs

(GS) - Get Report

is eager to repay the $10 billion it received from the U.S. government under the troubled asset relief program, CFO David Viniar said Tuesday, according to reports.

Speaking at a Credit Suisse-sponsored financial services conference Wednesday, Viniar said the company "would like to get out from under" the executive pay restrictions the government imposes on banks, like Goldman, that have accepted investments from the Troubled Asset Relief Program, according to

Reuters

.

"I am sure the Treasury wants us to pay it back at some point, and we want to as well," Viniar said, according to

The Wall Street Journal

.

Executive compensation has been one of the most controversial aspects of the TARP. Former Treasury Secretary Hank Paulson initially opposed them in the legislation approving the $700 billion bailout. Though pay restrictions were ultimately included, an independent panel of overseers of the TARP concluded they were poorly enforced.

President

Barack Obama

and several members of Congress have since blasted banks receiving TARP money for awarding executives more than $18 billion in bonuses in 2008, according to New York State Comptroller Thomas DiNapoli. On Thursday,

Obama

announced that going forward, any companies receiving extraordinary aide from the government would be required to cap executive pay at $500,000.

As the furor grows, banks that get government money are expected to lose talented bankers to institutions that do not.

TheStreet.com

reported on Tuesday that a group of 12 investment bankers jumped ship from

Bank of America

(BAC) - Get Report

to join

Deutsche Bank

(DB) - Get Report

. The German bank did not receive U.S. government funds, and thus are not under pressure to rein in pay. It has also not received any money from the German government, according to a bank spokesman.

The environment could provide an opportunity for smaller firms to attract top talent, recruiters say.

"Any bank that has not taken TARP money, such as a

Lazard

(LAZ) - Get Report

, could, for that very reason, look more attractive than any of these other banks," says Tom Cleary, president of executive recruiting firm Landfall Partners.