FROM SCRATCH NEWSWIRE

SCAVENGING THE INTERNET

U.S. BANKS OWE BILLIONS IN PAY, PENSIONS TO EXECUTIVES: REPORT (USA)

Posted by Gilmour Poincaree on October 31, 2008

October 31, 2008 – Reuters

Troubled financial giants getting cash infusions from the U.S. Federal Reserve owe their executives more than $40 billion for past year’s pay and pensions as of the end of 2007, the Wall Street Journal said in an analysis.

The sums owed are mostly for special executive pensions and deferred compensation, including bonuses, for prior years, said the paper.

The Journal also cited investment banks Goldman Sachs Group Inc, which owes its executives $11.8 billion; JPMorgan Chase & Co, which has a payment of $8.5 billion pending; and Morgan Stanley, which owes between $10 billion and $12 billion to executives.

Criticism of executive pay has gained momentum this election year with presidential candidates from both major parties lashing out over rich payouts for CEOs of companies that have suffered big losses in the U.S. housing market bust and ensuing credit crisis.

As a result, the government has sought to rein in executive pay at banks getting federal money as part of the Bush administration’s $700 billion bailout program.

But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces, the Journal said.

For instance, nine banks paid out an estimated $50 billion of bonuses in 2007, based on the total compensation expense for the companies and assuming that for investment banks about 60 percent of total compensation was allocated for bonuses, and for commercial banks about 20 percent went to bonuses.

Goldman Sachs, Morgan Stanley and JP Morgan Chase did not immediately return calls seeking comment.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘FINANCIAL MIRROR’ (Cyprus)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: