Remember all those banks that got millions and millions of taxpayer dollars to help prop up their businesses and the economy in general? The deal was that if a bank took the government funds, they wouldn’t provide any of their executives with “golden parachutes.” (If you're unfamiliar with the term, that’s when an executive gets paid a ton of money to do nothing but leave the company.)
As we featured this week, our partners over at ProPublica are reporting that a couple of bankers have skirted that rule and are walking away with millions.
First in flight is Lisa Binder, former COO of Associated Banc-Corp in Wisconsin (Stock Quote: ASBC), which took $525 million in TARP funds.
According to ProPublica, “Earlier this month, Lisa Binder, Associated Banc-Corp’s president and chief operating officer, resigned. But she didn’t leave empty-handed: The bank agreed to pay her $1.65 million. Binder’s severance agreement, filed last week with the Securities and Exchange Commission, acknowledges the ban on golden parachutes. But Binder’s payment isn’t a golden parachute according to the agreement: It’s compensation for 'services rendered.' Those services? Not competing with the bank.”
Well played, Ms. Binder. You get $1.65 million and in exchange you will do absolutely nothing. Nice non-work if you can get it.
Then, Footnoted.org uncovered another hero of capitalism who worked at Hampton Roads Bankshares in Virginia (Stock Quote: HMPR), which grabbed $80.3 million in TARP bucks.
ProPublica writes, ”Hampton Roads Bankshares… announced last week that its CEO was retiring. On Friday, the bank disclosed that in addition to a full slate of retirement benefits, the exec will be paid $1.3 million for ‘consulting duties.’ Jack Gibson, the departing CEO, evidently doesn’t think he’ll be working too hard consulting. ‘I can think of no better time to fulfill my personal goal of early retirement,’ he said in a press release announcing his exit. ‘It is well known within the company that I would like to retire by age 60, and I’m almost there.’ During the period of his three-year consulting gig, the bank has also agreed to cover his membership dues at a local country club.”
Both of these stories are nauseating. I have no doubt that, now that the light of public scrutiny has been shined on these two executives, they'll want to make amends.
Mr. Gibson and Ms. Binder, here’s what you need to do: Pool your golden parachutes together and throw a $3 million party for all of your banks debtors, particularly the ones facing foreclosure. Fly them in from wherever they live and put them up in a nice hotel. You could even have the party at your country club, Mr. Gibson. (You know, the one you’re not paying dues for.) I think that will go a long way in showing people that you really care about fiscal responsibility. These days lots of people could probably use a mini-vacation and swanky party.
On the other hand, you guys could just give the money back.
More of the worst after the jump.