Ken Lewis, Bank of America Chief, Gives Up Bonus

Bank of America's chief executive, Kenneth D. Lewis, is joining the growing ranks of top banking executives who are giving up annual bonuses after a dreadful year in the financial industry.

Mr. Lewis told the bank's employees by e-mail Tuesday that he had recommended to the board that he and other senior executives receive no bonuses for 2008. He said he expected the recommendation to be accepted.

Mr. Lewis's decision comes less than a week after Citigroup's chief executive, Vikram S. Pandit, said he and the bank's chairman, Winfried F. W. Bischoff, would forgo their bonuses and slash the amounts paid to other senior executives by at least 40 percent.

Read the whole story here.

Comments

[mergina]

WHY THE HELL DOES ANYONE who makes as much as these guys do, need a bonus, ESPECIALLY IN THIS ECONOMIC CLIMATE?

[schatsie]

And did he get stock options? Did he give up his executive chef, his chauffeur, his country club dues, his tickets to the Met, his apartment in Manhattan, his health insurance, his sick leave, his vacation, his pension. his gym fees, his physical exam...his car and expenses, the life insurance policy, his company junkets, his 401K contribution from the company. his corporate jet... THESE are all considered BUSINESS EXPENSES and are not taxed, so we tax payers have to make up the difference in the taxes he has avoided....and we are not even talking about the business lunches at the Waldorf or 21 club or business dinners....My god, I could retire on the expenses for him alone...

[waverly]

One question to Wall Street:

When has a bonus become the absolute instead of based on PROFIT in your world?

Your arrogance is overwhelming!

[mergina]

REALLY.

[takeyourballandgohome]

Great....will we not see ATM fees now which far and above pay for these leaches perks/bonusi.

[lmvd3]

And then he whispered to the execs: "Don't worry. It will be tucked into your salary increases."

[inorbit]

Finally, someone with some integrity.

[littlepuffycloud]

Who else in America, except these vultures got bonuses?! My husband got a box of candy as his bonus this year. Chocolate candy.

[Icantbelieveher]

That's one box of candy more than we got!

[nomadicexpat]

YOURE husband is not on a compensation plan that is designed around bonuses. the wall street model is such that people are paid a wage which is backed up by an incentive scheme ("a bonus") designed to pay out based on what is contributed to the bottom line

generally it is very transparent. you put X into the banks bottom line, you receive some % for yourself. contribute a million dollars worth of value, receive around 100k. contribute 100mm in value, receive around 10mm.

the vast majority of this money is either fee based income, or income derived from revenues which are identifiable. some requires warehousing of risk and that is what has caused the problems. but there is no reason that the guy who produced 100mm in fee income from debt underwriting, or the trader who took 25mm from the markets (and had a flat position at the end of the year) shouldnt be compensated for their contributions to the shareholders

[Furby]

"There is no reason that the guy who produced 100 mm in fee income from debt underwriting, or the trader who took 25 mm from the markets shouldn't be compensated"

Surely you gest!! Getting bonused on imaginary values is obscene. How long have all these guys known that the bottom was bound to fall out. And didn't these guys actually time the collapse to occur after most of them had a chance to pull out their own investments. You're only fooling Americans nomadicexpat, no one else buys it, not for a minute.

[DiogenesOfAlaska]

Well, I would say that you are making a funny little understatement when you say that

'some requires warehousing of risk and that is what has caused the problems.'

and then continue to claim that the majority of the performance could be measured on some kind of cut-and-dry percentage of fee income.

Instead of wasting my time with your smokescreens, why don't you simply face the fact that your business would have long been competed out of existence if it were indeed as simple as that?

You are one joker, my friend.

[unite4change]

Nomadicexpat, they sure if you know all of what you wrote above, they should have know in some cases, they could receive their base pay only without a bonus.

[schatsie]

If one word of what nomad said was valid, Wall Street would not need a bailout....get it?
Instead, they take the rewards for the risk and dump the losses on the taxpayer... Besides that aren't the bonuses taxed as capital gains and not income taxes...

Also, is the company paying his income tax and is that reflected in the total compensation reported in the SEC filings?

[dagnome27]

Bloodsucking predator - B of A has some of the MOST predatory fees in the world. Why not cap your annual compensation as well. Ken? THEN we might believe you're sincere...

[FreedomCorpse]

the bonuses will be deferred into stock option awards.

[pharm]

Now if they can get back the $18 billion of the bailout funds they invested in China, and spread some of it in this country for credit(what it was to used for), that would be good news!

[drymartini1]

thats a good idea huh !! lend more to deadbeats when the economy is getting worse.

[swiss-ski]

I feel so bad for Ken. Can we take up a collection to help him and BOA out? PLEASE!!!!!!!!!!!!!!!!!

[Rictracee]

all companies who ARE NOT PROFITING ANY PROFIT should not be getting a bonus.. i have never heard of people getting bonuses when there are no profits.. It just goes to show you how CEO's have been robbing their own companies for years.

[DiogenesOfAlaska]

Exactly.

As many have commented: the strange thing about these announcements is that it is not already taken for granted that in a year with negative performance, the bonus is at most ZERO.

In fact, the bankers are using these announcements to manage the expectations of the public and of investors.

There is no justification for a bonus when you generate losses. To even suggest otherwise is very deeply and very profoundly anti-capitalist.

It is feudalism or plutocracy. There is zero legitimacy for this attitude. None whatsoever. None.

In fact the only justification for loss-generating managers to not be fired is that the firms cannot fire everybody at once.

[TrooAmerican]

Personally, i think every single Financial Executive that was involved with packaging, and selling the derivatives, and securities and derivative scheme to invest on the performance of the investments whatever that was called, should be put in jail for 10 yrs, and have 100% of their assets seized by the IRS or the Treasury, and be Banned from ever working in the Financial industry again or from being hired as a CEO, Board member, or Top executive of any company.

Done.

[unite4change]

TrooAmerican, I agree, they knew what was going on but as long as they were making hugh profits, they didn't care. These financial institutions have been making hugh profits since 2000, where did all the money go? Into their private accounts and to shareholders. So why is Main Street bailing out these financial institutions when they have pocketed money they have made for years, because Paulson, Bush, and Bush's base would rather have Main Street pay to bailout these foreign banks and businesses who were cheated by Wall Street.

[schatsie]

That is exactly what Charles Keating was doing and he went to jail for RACKETEERING,,,I cannot think of one single Wall Streeter that I have an ounce of sympathy for...They should all be paying back taxes on the unwarranted bonuses for the last 4 years...

[Indubio]

What needs to happen is a total review of how compensation is paid to every executive in every publicly traded corporation. Americans corporations pay their executives too much. That's been obvious for a long while. Executuve compensation should be linked to the pay of rank and file employees. An executive should never get a raise unless employees get the same percentage raise. An executive gets a bonus same percentage should be given to employees. Frankly, no one alive or dead is worth $15 million dollars a year let alone $100 million dollars or more. If corporations insist on paying people such obscene amounts over $25,000 should be taxed at a marginal rate that increases to a maximum of 90%.

[bellabeach]

Couldn't agree with you more "Indubio"...they should not be paid what they are regardless, NO ONE is worth what these Executives have been paid and I hope they will come under great scrutiny by the American people, we need to keep our eyes on these greedy and arrogant men!

[schatsie]

We don't need to have them flaunt their wealth or hide it like Bill Gates.. We need to restore the PROGRESSIVE TAX SYSTEM.. Half of the 5 trillion deficit that Bush added was due to the tax cuts for the UBER wealthy... and they are dodging taxes like nobody's business...

[Icantbelieveher]

That's been part of the entire economic problem! While executives have gotten huge raises, bonuses and stock options, they've given the average worker an extra $500 a year! It's been like that for the last 8 years! When, exactly, does the trickle down start, Bushy?

[nomadicexpat]

is a guy who creates wealth valued in the billions worth $100mm?

why should we deincentivize innovation to meet your socialistic vision of utopia?

[Furby]

Fictional wealth doesn't count.

[Harinama]

difference being, that these fat cats bilked investors to push the stock price up, took their "bonuses", and the stocks fell.

The rich never create wealth, they take it from the middle class/poor WHO ACTUALLY DO THE WORK.

The uber weathly need to be taxed into oblivion.

[DiogenesOfAlaska]

How do you attribute billions to the performance of a single individual? Show me the statistics that does that. Ah! It's proprietary! And it's too difficult for me to understand. That's the answer!

But that's not even half of what your problem is. Here are the other two halves (!)

From a portfolio point of view, assuming you do have the statistical argument you claim to have, why is value created by a single indiviual not a crass example of a risk driver? Of the Steve Jobs kind, you know?

And don't degrade yourself by claiming that the logical alternative to hundreds of millions in bonus payments is socialism. If you trust an argument like that, you should be fired. Why? Because it's horsepunk, that's why.

[schatsie]

I'll tell you why...So people will invest in your company... How is it that Germany has more regulation than we do here AND MORE ENTREPRENEURSHIP??? quit selling the dead horse...see Vanno.

[bachmantsk]

'Bank of America"s Chief Gives Up Bonus '

That's Big of him. What he needs to give up is his head.

[LazarusLong]

Gee, how magnanimous.

Try giving back the last 10 years of salaries and bonuses since you obviously didn't earn it.