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Banker Pay Targeted by Cuomo

New York Attorney General Andrew Cuomo has sent letters to eight big banks requesting a wealth of information about their compensation policies.



) --




Bank of America



JPMorgan Chase


, and

Goldman Sachs


are among the banks that will be receiving letters the New York State Attorney General's office requesting information about their bonus packages and related compensation structures.

New York Attorney General Andrew Cuomo is looking to dig deeper into how these banks, along with

Bank of New York Mellon



Morgan Stanley



State Street



Wells Fargo


, are structuring their bonus pools and distribution information for 2009.

According to the


- similar copies of which were sent to each of the banks - Cuomo has asked the institutions to provide information regarding the breakdown of cash, stock and other incentives, vesting periods, clawback provisions and "any other provisions to tie compensation to performance and/or the long-term health of your firm, as well as a description of how the 2009 bonus structures differ from 2008," an example of the letters reads. Of particular interest is how the banks believe compensation would have been impacted if they had not received funding from the Troubled Asset Relief Program, or TARP.

"As we informed your firm last year, when you received TARP funding, your firm took on a new responsibility to taxpayers," one of the letters states. "While your firm has now paid the TARP money back, it is not clear that your firm would have been in the same position now had you not received that TARP money. Accordingly, we also ask that the Board inform us of the policies, procedures, and protections the Board has instituted that will ensure Board review of all such company expenditures going forward."

A call to Cuomo's office requesting more information by


was not immediately returned.

Given the continued fallout in the financial sector last year, Wall Street bonuses are once again in the spotlight, as companies are set to begin their payouts in the next few weeks. Firms seem aware of the issue and, in general, are moving towards making stock a bigger part of the equation than cash than in the past in order to better align employee interests with long-term objectives, but there is still likely to be plenty of outcry when the numbers start to trickle in.

Goldman Sachs, often held up as the poster child for compensation issues, said recently that its 30-member management committee won't be receiving cash bonuses for 2009. Instead, they will receive what Goldman termed "shares at risk," a form of stock with a five-year holding period, among other provisions. Another example is that Morgan Stanley's John Mack, who ceded the post to James Gorman at the start of 2010, has said he will not take a bonus in 2009 - the second year in a row he's done that.

The banks have several weeks to respond to Cuomo's demands, according to a

New York Times


--Written by Laurie Kulikowski in New York.