Archive for Banks

At Last The Knife Goes In

Posted in Justice, Modern World, Obama, President, USA with tags , , , on 23/10/2009 by floroy1942

Finally a brave politician has put the knife into the banking sector, and companies that received government aid at the start of the current financial crisis. The income of these bank executives and CEO’s has been slashed from it’s previously outrageous levels to, what I would call, a more acceptable level, but all is not what it seems.

President Obama has been the first world leader with guts enough to attempt cutting the exorbitant salaries of these people. He appointed Kenneth Feinberg this summer to look into the huge payments, and he has just released the first phase results.

I can hear the moans in the Boardrooms across America now; “Damn! I was going to get myself another Ferrari, a new villa in the Bahamas, a massive yacht, and a huge new cabin cruiser to park in Puerto Banus Harbour in Spain (the most expensive), and oh, the wife wanted a new ironing board. I was even thinking of buying Yellowstone National Park to build some condo’s. Now I guess all that will go on hold. Damn that Obama fella!. Doesn’t he understand I want to be super-rich?”

Of the top seven companies bailed out by the US tax payer, 136 employees from; AIG, Citigroup, Bank of America, General Motors, Chrysler, and Chrysler Financial have all taken a hit.

According to the news, bank executives and CEO’s will have to take a 90% pay cut, while their employees, traders etc, would take a cut of up to 50%. Bosses would no longer receive huge bonuses, but get stock in their company they could not sell until 2011.

It is staggering to see the pay-packets some of these individuals take home. Top of the tree is Sanjay Jha, Co-CEO of

struggling Motorola, who took home a massive $104.4 million in 2008. His salary was a mere $484,615, but he made a further $412,096 in ‘Perks’, $36 million in stock grants and $67,59 million in stock options.

He and his fellow CEO Gregory Brown ($24.2 million), were magnanamous in December last year and took a 25% salary cut. At the same time, Motorola froze all employees salaries and retirement contributions. It sounds like a case of; “Pull up the ladder Jack, I’m on board”.

Mr Jah no doubt owns several Ferrari’s, probably one for each day of the week. His only problem would be to decide which colour to drive on which day! “Let me see. Monday the blue one, Tuesday the black one…….”

I wish I had those problems, the only trouble is I would find it hard to decide; I used to be indecisive, but now I’m not so sure!

Mr. Jah is of course not alone with this problem. The CEO’s of; Oracle, Walt Disney, American Express, Citigroup, Hewlett Packard, Calpine, News Corp, Honeywell International and Proctor and Gambell all face the same agonizing problems, and I haven’t mentioned the car industry yet!

Among the “Money Men’, under the new rules AIG’s top executive will get the highest salary at $10.5 Million which will include a salary of $3 million, a $3.5 million bonus, and $4 million in stock options. AIG is still one of the companies bailed out by the tax payer. But there’s worse to come!

The top 22 executives of Citigroup, bailed out with billions, will share a staggering $118 million in salary, stock options, and restricted stock options that will increase over the next four years. Mama! I want to be a bank executive. Please, can I????

All I can say is; firstly, I should have chosen banking as a career instead of the military and aircraft industry, and secondly; everyone should start keeping their money under the mattress and let the bankers starve.

Of course, the bankers and CEO’s are complaining. Their arguement is, that without the current bonus scheme they will lose all their star performers to companies that are not covered by the new ruling. Citbank and Bank of America have already reported losing key personnel to companies like Goldman Sachs and JP Morgan Chase who managed to escape from the governments clutches during the summer. Some companies are activly engaged in luring away these people with promises of even double their previous bonuses and salaries. Who can refuse that.

The downside is, the loss of key personnel may affect the recovery of the institution concerned, putting repayment of the government loans in jeopardy.

But when all is said and done, these people may not lose as much as first thought. The ruling on bonuses put in place by Ken Feinberg is not watertight. Instead of bonuses they will get ‘Incentive Pay’ in the form of company stock, so all may not be lost after all, just be a little more complicated.

Scrutiny on the part of the general public is advised to see how all this ends, but I for one hope the money trail dries up for these people because they have been milking us for far too long.

All we need now is for the heads of state and governments around the world to take action on this despicable practice once and for all.

May your mattress bulge in all the right places!

Roy.

Lastest Score: Obama – 1 Fat Cats – 0

Posted in Britain, Justice, Modern World, Obama, President, USA with tags , , on 04/02/2009 by floroy1942

At last we have someone of conscience who is willing, and able, to tackle the ‘Fat Cats’ of the Financial World!

Today it was made known that President Obama has ordered that Leaders of the Financial World in America may not earn more than $500,000 (€388,000) salary per year.

This is because, at the time when banks such as Citigroup and AIG were accepting hand-outs from the American Government of around $300billion to save them from bankruptcy, they were handing out to themselves huge bonus’s amounting to several billion dollars.

In 2008, American Banks alone gave out a total of $18billion as bonus’s to their Traders, Board Members, and in particular, C.E.O’s. It is also known that Merrill Lynch of London gave out 4billion while they were receiving money from the British Government.

All tax-payers have a right to be incensed at this level of greed and insensibility on the part of Bankers. I for one am happy to see that a man for whom the world holds great hope in this time of turmoil, i.e. President Obama, has taken the bull by the horns and wrestled it to the ground.

Now it is the turn of Prime Minister Brown of Britain, Angela Merkel of Germany, and all the other leaders, to follow the example of Obama. They too should have the courage to tackle the ‘Fat Cats’ and bring them to earth where the rest of us live. Perhaps now that he has had the nerve to show them the way, they will. I hope so, and I’m sure so do you!

May all your worries be small ones.

Roy

P.S. I think President Obama must have read my Post from Saturday 31/1/09 – Well, maybe not!

Update 5 February:

This mornings news has stated that Prime Minister Brown of the U.K. agrees wholeheartedly with the actions of President Obama yesterday, but, has fallen short of taking any direct action. After the bailout, the British Government now owns 70% of the countries leading banks, but Brown is quoted as saying he is leaving the decision up to the banks themselves. RBS Bank has indicated the paying of bonuses is under review at this time. I for one will be interested in the final outcome!

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