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Thread: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

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    Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Bloomberg.com: Politics

    Executives at Goldman Sachs Group Inc., JPMorgan Chase & Co. and hundreds of financial institutions receiving federal aid aren’t likely to be affected by pay restrictions announced yesterday by President Barack Obama.

    The rules, created in response to growing public anger about the record bonuses the financial industry doled out last year, will apply only to top executives at companies that need “exceptional” assistance in the future. The limits aren’t retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more.
    Obama, 47, “is not proposing to go back and get that $18.4 billion in bonuses back,” Laura Thatcher, head of law firm Alston & Bird’s executive compensation practice in Atlanta, said of the cash bonuses New York banks paid last year, the sixth- biggest haul in history. “Right now, we have not clamped down” on pay at banks.

    Huge Paydays

    In addition, some executives may be compensated for the potential reduced salaries with restricted stock grants, which may result in huge paydays after the bank repays the government assistance with interest.

    “They’re just allowing companies to defer compensation,” said Graef Crystal, a former compensation consultant and author of “The Crystal Report on Executive Compensation.”

    The restrictions are “a joke,” he said, because “if the government is paid pack, you can be sure that the stock will have risen hugely.”
    And now the banks are fleeing the TARP program, which was designed...to get the banks to accept the money.

    Goldman Sachs said yesterday it wants to repay $10 billion it got from Treasury under the TARP to signal the firm is healthy and to escape limitations that came with that infusion of money. “Our financial condition is sound and, subject to approval from regulators, we hope to repay TARP money as soon as practicable,” said Lucas van Praag, a spokesman for New York- based Goldman Sachs.

    JPMorgan CEO Jamie Dimon said Feb. 3 that the firm didn’t need capital and didn’t ask for TARP funding. The lender accepted the $25 billion it received from the first capital injection at the request of the government and to help stabilize the banking system, he said.
    And more details:

    The Associated Press: Banks could still find wiggle room in pay caps

    The squeeze on big paydays for executives of bailed-out banks will probably leave Wall Street plenty of wiggle room. Consultants on executive pay say the caps imposed by President Barack Obama on Wednesday will probably apply only to a few executives — not star traders, brokers and salespeople who routinely earn whopping pay packages.

    Others note Wall Street typically finds ways to exploit loopholes and figure this time will be no different.

    "You've got a lot of people on Wall Street who are not executives but still make extremely big salaries," said Mark Borges, a principal at compensation consulting firm Compensia Inc. "I suspect this doesn't impact them at all."
    Executive pay consultants say firms are sure to seek ways to get around the new rules anyway.

    That's what happened in 1993, when Congress limited the corporate tax deduction on executive pay to $1 million. That move fed the boom in stock option grants, which weren't subject to the limits.
    And just how many people will this affect?


    And the rules don't spell out how many executives would be subject to the cap. Compensation experts predicted anywhere from five to 25 executives per bank could face the new restriction. That would still represent only a tiny fraction of a large firm's brass.

    I repeat: This thing is just a load of populist crap. Recognize when you're being played for fools.
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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    It's amazing how these kings can line their pockets on the work of the slaves when they didn't even start the companies they work for. Oh, I am on top and now that gives me the right to line my pockets with all of the companies profit. People should not have the right to give themselves raises unless everyone in the corporation can do that. Capitalism is a real wonder.

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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    If this is true, then the future name of the merger of Citibank and Morgan-Stanley is going to be City Morgue.
    Last edited by danarhea; 02-05-09 at 06:47 PM.
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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Quote Originally Posted by nightflyer View Post
    It's amazing how these kings can line their pockets on the work of the slaves when they didn't even start the companies they work for.
    Thanks, Comrade.
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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    The move by Goldman to repay the TARP money could be seen as a confidence booster by the financial community. They're strong enough to return TARP money so that must mean that they are financially healthy - let's invest in them.

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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Quote Originally Posted by RightinNYC View Post
    I repeat: This thing is just a load of populist crap. Recognize when you're being played for fools.
    Or when someone is taking advantage of a crisis to make an unprecedented grab for power.

    Interesting that some had no problem seeing the Patriot Act as just that.
    “Offing those rich pigs with their own forks and knives, and then eating a meal in the same room, far out! The Weathermen dig Charles Manson.”-- Bernadine Dohrn

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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Quote Originally Posted by RiverDad View Post
    The move by Goldman to repay the TARP money could be seen as a confidence booster by the financial community. They're strong enough to return TARP money so that must mean that they are financially healthy - let's invest in them.
    Which would lead me to believe that they intentionally lied to the US gov't in the first place to get the money. If they can pay it back so quickly, clearly they weren't hurting as much as they wanted us to think they were.

    Let's give Obama credit for exposing these Bank frauds. Yet another reason why the salary cap was a good idea.
    Affiant further sayeth not.

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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Quote Originally Posted by Indy View Post
    Which would lead me to believe that they intentionally lied to the US gov't in the first place to get the money. If they can pay it back so quickly, clearly they weren't hurting as much as they wanted us to think they were.

    Let's give Obama credit for exposing these Bank frauds. Yet another reason why the salary cap was a good idea.
    Did you miss this part?

    JPMorgan CEO Jamie Dimon said Feb. 3 that the firm didn’t need capital and didn’t ask for TARP funding. The lender accepted the $25 billion it received from the first capital injection at the request of the government and to help stabilize the banking system, he said.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Quote Originally Posted by RightinNYC View Post
    Did you miss this part?
    Truth be told, yes, I did miss that part. Now, what exactly is the problem with them giving back the money? If they don't need it, why not give it back? If they do, then deal with the pay limits.
    Affiant further sayeth not.

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    Re: Goldman, JPMorgan Won’t Feel Effects of Executive-Salary Caps

    Quote Originally Posted by nightflyer View Post
    It's amazing how these kings can line their pockets on the work of the slaves when they didn't even start the companies they work for. Oh, I am on top and now that gives me the right to line my pockets with all of the companies profit. People should not have the right to give themselves raises unless everyone in the corporation can do that. Capitalism is a real wonder.
    Kings and slaves?

    Dude, get out of the basement and get some perspective.

    ~Sheesh~

    Seriously, what kind of idiocy leads someone to draw such a picture of American capitalism when there is, you know, real slavery out there? This fool needs to believe that America is a worse place for workers than the worker's paradise in North Korea, Cuba, China, all of Africa, the Middle East, etc.

    What compels someone to need such a perception?

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