With the financial system on the verge of collapse in late 2008, a group of troubled banks distributed more than $ 2 billion in premiums and other payments to their highest incomes. Now, the federal authority on pay banker says that nearly 80 percent of that amount was undeserved.
In a report to be published on Friday, Kenneth R. Feinberg, special master of the Obama administration for executive compensation, is expected to name 17 companies that have financial questionable payments totaling 1.58 billion dollars immediately after accepting billions of dollars in aid taxpayer, according to two government officials with knowledge of its conclusions, who requested anonymity because of the sensitivity of the report.
The group includes Wall Street giants like Goldman Sachs, JPMorgan Chase and American International Group, as well as smaller lenders Holdings Boston Private Financial. points in the report of Mr. Feinberg to companies, said he paid eye-popping amounts or criteria used to award bonuses at random, people with knowledge of its findings said, and he did a Citigroup the biggest offender.
Still, Mr. Feinberg has very limited powers to recover money. It can use its status as point man on Obama's compensation jaw businesses by reimbursing the government, but it has no legal authority to recover overpayments.
political influence of Mr. Feinberg has been weakened by the rapid repayment by banks of their funds bailout. Eleven of the 17 companies that were criticized in the report have repaid the government with interest, so they have no obligation to repay outstanding.
Accordingly, Mr. Feinberg is merely propose that banks voluntarily adopt a provision "brake" that would allow their boards to cancel or amend any bonus payments or employment contracts in the event of future crisis Financial. All 17 companies have said to Mr. Feinberg that they intend to adopt this provision, but none have resolved to do so.
Feinberg payments should call ill-advised but not illegal or contrary to public interest, people with knowledge of its report.
On Wall Street, meanwhile, benefits and pay have rebounded. Goldman Sachs is in the process of finalizing an average of $ 544,000 per employee in salary and bonuses, although many could earn several times that amount. investment bank JPMorgan Chase is on track to pay its workers, on average, about $ 425,000, while the average employee of Morgan Stanley could raise about $ 260,000.
If the second half of 2010 is played like the first half, Wall Street bonuses will be paid about the same level as last year similar to 2007 levels, when crisis has just begun to unfold.
"It's healthier than I ever imagined a year ago," said Alan Johnson, a compensation consultant of long standing who specializes in financial services.
Mr. Feinberg was appointed last month as an independent director for claims related to oil spill BP, making it likely that the release of its findings on financial firms will be his last act as a supervisor banker pay. http://jodnet.blogspot.com
The review, mandated by the bill's 2009 economic recovery has broadened functions Mr. Feinberg to include review of plans pay high wages to 419 companies who fund bailout. However, it does not give him the power to require changes to the compensation arrangements, as he did in each of the last two years to seven companies that received multiple bailouts.
Mr. Feinberg has spent five months reviewing the remuneration paid to each company between 25 of the highest incomes in October 2008 when the first and bailouts have been distributed in February 2009, when the stimulus bill took effect. This reduces its review about 600 executives from 17 banks, with earnings totaling 2.03 billion.
Feinberg criteria to identify the worst offenders were large payments, in whole or to specific individuals; too generous package output, or a lack of clear performance criteria or other justification for extra pay.
Mr. Feinberg then addressed each of the 17 companies with the solution proposed by conference call over the last two weeks. The 11 companies that have fully repaid their bailout money are American Express, Bank of America, Bank of New York Mellon, Boston Private Capital One Financial, Goldman Sachs, JPMorgan, Morgan Stanley, PNC Financial; U.S. Bancorp and Wells Fargo.
The six companies that have not repaid all of their funds are bailing out AIG, Citigroup, CIT Group, M & T Bank, Regions Financial and SunTrust Banks.
Among banks that have not repaid the government, Citigroup has been identified by Mr. Feinberg to have compensation packages of more serious during the rescue period, according to officials with the knowledge of its report. The bank submitted several hundreds of millions of dollars in compensation in 2008 while trying to stay afloat.
About two-thirds of the bonus payments were excessive provided by Andrew Hall and another trader who was part of the unit of the bank Phibro Energy trade. Citigroup sold the company to Occidental Petroleum last fall under pressure from Mr. Feinberg, after the disclosure that Mr. Hall received a payment of 100 million dollars.
Mr. Feinberg should not name the executives who received the highest rewards.
His opinion is among several initiatives scan banker pay compensation. In June, the Federal Reserve has ordered roughly two dozen largest banks to address the pay practices of many that even after the crisis, he said encouraged excessive risk taking.
European banking regulation has introduced tough new standards for bonus payments this month. And the Federal Deposit Insurance Corporation is developing a plan that would partly equal insurance premiums Bank to perceived risk of their executive compensation packages. This proposal could be considered by the Agency Board next month.
In a report to be published on Friday, Kenneth R. Feinberg, special master of the Obama administration for executive compensation, is expected to name 17 companies that have financial questionable payments totaling 1.58 billion dollars immediately after accepting billions of dollars in aid taxpayer, according to two government officials with knowledge of its conclusions, who requested anonymity because of the sensitivity of the report.
The group includes Wall Street giants like Goldman Sachs, JPMorgan Chase and American International Group, as well as smaller lenders Holdings Boston Private Financial. points in the report of Mr. Feinberg to companies, said he paid eye-popping amounts or criteria used to award bonuses at random, people with knowledge of its findings said, and he did a Citigroup the biggest offender.
Still, Mr. Feinberg has very limited powers to recover money. It can use its status as point man on Obama's compensation jaw businesses by reimbursing the government, but it has no legal authority to recover overpayments.
political influence of Mr. Feinberg has been weakened by the rapid repayment by banks of their funds bailout. Eleven of the 17 companies that were criticized in the report have repaid the government with interest, so they have no obligation to repay outstanding.
Accordingly, Mr. Feinberg is merely propose that banks voluntarily adopt a provision "brake" that would allow their boards to cancel or amend any bonus payments or employment contracts in the event of future crisis Financial. All 17 companies have said to Mr. Feinberg that they intend to adopt this provision, but none have resolved to do so.
Feinberg payments should call ill-advised but not illegal or contrary to public interest, people with knowledge of its report.
On Wall Street, meanwhile, benefits and pay have rebounded. Goldman Sachs is in the process of finalizing an average of $ 544,000 per employee in salary and bonuses, although many could earn several times that amount. investment bank JPMorgan Chase is on track to pay its workers, on average, about $ 425,000, while the average employee of Morgan Stanley could raise about $ 260,000.
If the second half of 2010 is played like the first half, Wall Street bonuses will be paid about the same level as last year similar to 2007 levels, when crisis has just begun to unfold.
"It's healthier than I ever imagined a year ago," said Alan Johnson, a compensation consultant of long standing who specializes in financial services.
Mr. Feinberg was appointed last month as an independent director for claims related to oil spill BP, making it likely that the release of its findings on financial firms will be his last act as a supervisor banker pay. http://jodnet.blogspot.com
The review, mandated by the bill's 2009 economic recovery has broadened functions Mr. Feinberg to include review of plans pay high wages to 419 companies who fund bailout. However, it does not give him the power to require changes to the compensation arrangements, as he did in each of the last two years to seven companies that received multiple bailouts.
Mr. Feinberg has spent five months reviewing the remuneration paid to each company between 25 of the highest incomes in October 2008 when the first and bailouts have been distributed in February 2009, when the stimulus bill took effect. This reduces its review about 600 executives from 17 banks, with earnings totaling 2.03 billion.
Feinberg criteria to identify the worst offenders were large payments, in whole or to specific individuals; too generous package output, or a lack of clear performance criteria or other justification for extra pay.
Mr. Feinberg then addressed each of the 17 companies with the solution proposed by conference call over the last two weeks. The 11 companies that have fully repaid their bailout money are American Express, Bank of America, Bank of New York Mellon, Boston Private Capital One Financial, Goldman Sachs, JPMorgan, Morgan Stanley, PNC Financial; U.S. Bancorp and Wells Fargo.
The six companies that have not repaid all of their funds are bailing out AIG, Citigroup, CIT Group, M & T Bank, Regions Financial and SunTrust Banks.
Among banks that have not repaid the government, Citigroup has been identified by Mr. Feinberg to have compensation packages of more serious during the rescue period, according to officials with the knowledge of its report. The bank submitted several hundreds of millions of dollars in compensation in 2008 while trying to stay afloat.
About two-thirds of the bonus payments were excessive provided by Andrew Hall and another trader who was part of the unit of the bank Phibro Energy trade. Citigroup sold the company to Occidental Petroleum last fall under pressure from Mr. Feinberg, after the disclosure that Mr. Hall received a payment of 100 million dollars.
Mr. Feinberg should not name the executives who received the highest rewards.
His opinion is among several initiatives scan banker pay compensation. In June, the Federal Reserve has ordered roughly two dozen largest banks to address the pay practices of many that even after the crisis, he said encouraged excessive risk taking.
European banking regulation has introduced tough new standards for bonus payments this month. And the Federal Deposit Insurance Corporation is developing a plan that would partly equal insurance premiums Bank to perceived risk of their executive compensation packages. This proposal could be considered by the Agency Board next month.
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