A new report from a government official has confirmed what most Americans already believe: bailed-out banks distributed big bonuses without good reason.
Kenneth Feinberg, the Obama administration’s pay czar, tasked with monitoring executive compensation, is planning to release a report today slamming 17 financial businesses for doling out $1.58 billion in “unwarranted bonuses.” According to the New York Times, these bonuses were paid out “at the height of the financial crisis” in the end of 2008 and beginning of 2009, right at the time when these same Wall Street institutions were accepting massive taxpayer bailouts.
The culprits include many familiar names and some lesser known institutions. “The group includes Wall Street giants like Citigroup, Goldman Sachs and the American International Group as well as small lenders like Boston Private Bank. Mr. Feinberg’s report calls out companies that he says paid eye-popping sums or used haphazard criteria for awarding bonuses, the people with knowledge of his findings said,” the Times reports.
This $1.6 billion number shouldn’t come as too much a surprise to anyone. Back in 2008, the Associated Press reported that banks had paid out a whopping total of – you guessed it - $1.6 billion to top executives despite the fact that those banks had shown “poor results.” According to that report, financial institutions paid out benefits that included “cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management.”
At that time, many Americans expressed outrage that these bailed-out businesses, and their employees, would take it upon themselves to spend our money on this kind of luxury. As Marc Kramer wrote on MainStreet early last year, “There's no way Citigroup (Stock Quote: C), JPMorgan (Stock Quote: JPM) or any other Wall Street firm would give any company a dime without some control over how the money is spent. As a recipient, you have a choice of accepting the money and the conditions that go along with it.”