|
Citigroup Goldman Asked by Waxman to Justify Bonuses
Nov 02,2008 00:00
by
saroja
Congressional investigators demanded Citigroup Inc., Goldman Sachs Group Inc. and seven other banks justify billions of dollars in pay and bonuses after they accepted $125 billion as part of a taxpayer-funded bailout. In letters to the nine firms today, Representative Henry Waxman, chairman of the House Committee on Oversight and Government Reform, said they collectively will pay $108 billion in employee compensation and bonuses in the first nine months of 2008, almost the same amount as last year. ``I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record,'' Waxman wrote. He cited an Oct. 27 Bloomberg News article detailing how Goldman, Morgan Stanley and Merrill Lynch & Co. have already accrued $20 billion to pay bonuses this year. The letter was also sent to Bank of America Corp., Bank of New York Mellon, JPMorgan Chase & Co., Merrill Lynch, Morgan Stanley, State Street Corp. and Wells Fargo & Co. Waxman asked the firms to supply the information by Nov. 10. ``We look forward to cooperating with Chairman Waxman's request,'' said Michael DuVally, a spokesman for Goldman. Citigroup ``will adhere to the requirements in the government program including restrictions on executive compensation,'' said Michael Hanretta, a New York-based spokesman of the bank, in an e-mail. Citigroup has paid or accrued $25.9 billion in wages, health insurance and other benefits for its 352,000 employees globally in 2008, including more than $1.5 billion of charges related to headcount reduction, Hanretta said. Snowe `Frustrated' Spokespeople for the other firms declined to comment or didn't immediately reply to requests for comment. Senator Olympia Snowe, a Maine Republican, issued a statement today saying she was ``deeply frustrated by Wall Street's plan to distribute billions of dollars'' in pay and bonuses. ``Financial institutions that have accepted federal assistance should be required to face consequences from their earlier bad decisions and cancel these bonuses,'' she said. Waxman, a California Democrat, asked the nine banks to divulge total company compensation, average compensation for each employee broken down by salaries, bonuses, and benefits, and the reasons for any year-to-year changes in the amounts for 2006, 2007 and 2008. Waxman also asked for the number of employees paid or projected to be paid more than $500,000, as well as the total and projected compensation for the banks' 10 highest-paid employees. Great Expectations More than one-third of Wall Street employees surveyed by a recruitment Web site expect a bigger bonus this year than last year even amid the worst financial crisis since the Great Depression. The online survey of 1,300 people was conducted between Oct. 13 and Oct. 21, according to an e-mailed statement from eFinancialCareers, owned by New York-based Dice Holdings Inc. http://www.bloomberg.com/apps/news?pid=20601103&sid=an4Aqrk |