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

RightinNYC

RightinNYC

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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.
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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.”
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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.
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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."
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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.
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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.
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I repeat: This thing is just a load of populist crap. Recognize when you're being played for fools.
 
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.
 
If this is true, then the future name of the merger of Citibank and Morgan-Stanley is going to be City Morgue. :mrgreen:
 
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nightflyer said:
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.
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Thanks, Comrade. :roll:
 
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.
 
RightinNYC said:
I repeat: This thing is just a load of populist crap. Recognize when you're being played for fools.
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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.
 
RiverDad said:
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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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.
 
Indy said:
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.
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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.
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RightinNYC said:
Did you miss this part?
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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.
 
nightflyer said:
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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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?
 
9th ward currently:
Lower%209th%20Ward.0.jpg


How the "other half" lives:
Kingsmill-492.jpg


homestead01.jpg


'nuff said.
 
I wonder why the Democratic Mayor and Governor were unable to protect their own residents. I wonder why the Democratic-controlled levy districts were unwilling to spend that federal largesse to ensure that the levy system was capable of protecting those residents. I wonder why the Democrats are so upset at federal officials and banking leaders for the devastation wrought by Katrina and that their own elected officials could not effectively prepare for nor respond to.

Just wonderin'...
 
JMak said:
I wonder why the Democratic Mayor and Governor were unable to protect their own residents. I wonder why the Democratic-controlled levy districts were unwilling to spend that federal largesse to ensure that the levy system was capable of protecting those residents. I wonder why the Democrats are so upset at federal officials and banking leaders for the devastation wrought by Katrina and that their own elected officials could not effectively prepare for nor respond to.

Just wonderin'...
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So now this is a democrat thing? Silly me, I thought we were talking about goldman sachs.
 
If a company takes money from the government knowing what strings are attached, then they should accept the strings.

However, if the government gives them money and then, after they've done it, say "oh, yeah, here are the strings we didn't tell you about," that's a different argument. Especially if it's months later and there's no feasible way to return the money.
 
Indy said:
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.
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Because the government wanted them to take the money. If banks don't take the money, then that defeats the entire purpose of the stimulus.
 
RightinNYC said:
The fact that you think this even resembles a logical argument is incredibly depressing.
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Please, like your side never throws out ridiculous arguments.

Honestly, I just threw those pics out there to mess with ya.
 
RightinNYC said:
Because the government wanted them to take the money. If banks don't take the money, then that defeats the entire purpose of the stimulus.
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Then they give the money back, no harm no foul. What is with all the bitching? Did the government say they can't give the money back? No. So the government isn't forcing them to do a damn thing.
 
Indy said:
Then they give the money back, no harm no foul. What is with all the bitching? Did the government say they can't give the money back? No. So the government isn't forcing them to do a damn thing.
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The point is that the government has a vested interest in getting these banks to take the money. If they then turn around and start demonizing and ****ting on the banks like Obama has, then the banks will do what they're doing and give the money back. End result? We're worse off than we were before.
 
RightinNYC said:
The point is that the government has a vested interest in getting these banks to take the money. If they then turn around and start demonizing and ****ting on the banks like Obama has, then the banks will do what they're doing and give the money back. End result? We're worse off than we were before.
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What vested interest? To free up lending, gee that worked well didn't it? :roll:

Look, we can toss this about back and forth all day long but, at the end of the day, he who lends the money calls the shots. Don't want the rules don't take the money. If these companies were doing just fine without the money and the government "begged" them to take it, well they shouldn't have any problem giving it back then now will they? They didn't increase lending when it was given to them so I see no down side of them giving it back since it clearly wasn't used for its intended purpose.
 
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