William Cohan: Bank Execs Got Rich On Bailouts With Stock Options

ft.com:

Few could argue with Barack Obama last week when the US president said Wall Street owed a debt of gratitude to taxpayers. Some of America's largest banks would not have survived without the trillions of dollars the government used to shore up the financial sector. Less remarked upon, however, is the personal windfall executives of the bailed-out institutions received as a result of Washington's largesse.

Read the whole story: ft.com

Comments

[billyfitz]

"The Fed is essentially financing risk taking with taxpayer money and allowing the high returns from high risk to bypass taxpayers. If a private institution rescues a distressed investment bank from imminent collapse, it will end up owning the entity and all its future profits. But all taxpayers got was a repayment of the Fed loans with low interest and warrants to buy stocks in the banks at a set price over ten years, while the investment bankers walked off with huge bonuses even when their banks were losing money. While the government is reported to have made a $4 billion profit from its rescue investments of $700 billion, analysts say that private investors would have realized a $12 billion return by paying market price rather than the bloated price that the government paid."

- Henry CK Liu

This says it all. The banksters robbed us blind with help from the Treasury and the Fed. How was this not a crime?

[msjimmied]

This morning Volcker would have his say, the framework we have right now is not working. He makes a lot of good points.

http://www.zerohedge.com/article/paul-volcker-blasts-goldman-business-model-moral-hazard-and-calls-return-glass-steagall

[PhilipTaylor]

How can a Country that prides itself on being the "Bright Guiding Light unto the WORLD" be allowing this MASSIVE THEFT of Wealth?

"Unbounded Greed" has become the MOTTO of American Corporations!

[nopilikia]

Lucky they aren't paid under the Chinese banking system.

[Konnie]

see what buying a government can do for your personal wealth! wow - now that's
capitalism! how is the old economy working for ya now fella. going pretty good.........

[nopilikia]

Best government money can buy.

[Mark Kraft]

Why should anyone be surprised about this? CEOs and execs have lots of stock options, and did well before the collapse. Obviously, they stand to gain if the company performs better in the markets... but if the company performs better, then the bailout is probably working.

It seems pointless to complain that Bush wasn't willing to sign off on harsh terms on the bank execs, under the circumstances. He was making it abundantly clear that something needed to be done, but that he wouldn't support significantly greater accountability...

Frankly, it would be difficult to legislatively strip these people of their shares. What can be done is to insist upon regulations that will make sure this kind of crap never happens again.

[Konnie]

barn door....................

[Fred Hood]

Want to see the truth about the banking industry watch this five part eye opening video on the banking industry and how they plan to keep us slaves serving them.

http://www.youtube.com/watch?v=_dmPchuXIXQ&feature=related

Cherokee Fred Jesus

[hulagirrrl]

so, how do we contact these fellas? I have a few community programs in mind that are shutting down due to lack of funds, maybe they like to donate a little bit.
Not to mention that our schoolteachers are being furloughed now.

[4TJefferson]

Simple. If Bankster CEO's are making huge bonuses or anykind, THE TARP MONEY HAS TO BE REPAID FIRST! End of story.

[DevRock]

Can someone explain to me, in non-loophole terms of course, how this is not criminal?Other than the fact I'm sure they are legally protected in TARP somewhere, this is criminal. These guys get away with this stuff left and right. They must fall asleep laughing.

[comicpro]

The arrogance and pompous attitude portrayed by the Wall Street crowd and bankers are criminal. They damn near destroy the financial system with their greed, get BILLIONS in Government taxpayer money and then proceed on the backs of the very people who kept them in fine soaps and cars to charge them up the wazoo for credit cards, fees and everything else associated with their business. I said it from the beginning. Let the banks fail that made bad bets. We would have been on our way to recovery already that much further. Nothing has changed from last year in regards to toxic assets. They are still on the books with no values. There needs to be a revolt in this country. I read a great book written by a friend of mine who called this in 06. The book is called Marblehead (here is the free preview) and this guy was right on!!!!!!!
http://books.google.com/books?id=aDkf8q4RMQ8C&printsec=frontcover&dq=Marblehead+Bell&sig=ACfU3U3teIDMVkLM02vXPwog2ivvy4r2xA#v=onepage&q=&f=false

[MikeDu]

You've got to realize this is the PURPOSE of corporate business now.
It used to be said 'the business of America is business'. Now, the business of business is wealth transferrance, the stockholders and customers be damned. You can drive your company a billion dollars into debt, but as long as the board of directors get their big paydays then you've had a good year.

[Badgirl]

Enviable. Truly enviable - they live like kings and retire or leave as very rich men. The average person legitimately wonders - what do they do, produce or accomplish to justify that pay scale? Its based on an employment contract and corporate profits. Even a $1 million / year non-sales or trading executive makes $480 an hour. What's minimum wage, $6/ hour? The average middle class, college grad works 8 to 10 years to gross an aggregate $1 million, and is lucky to dodge a few layoffs along the way.

[spinns17]

can they spend this money in jail?

[John-in-Exile]

During the Eisenhower administration, a period of unprecedented economic growth in the United States, the top incremental tax rate was 84%. High taxes did NOT impair economic growth. Let the parasites (or the geniuses, if you will) get their absurd salaries, then tax the guts out of them. The urge to power and success is NOT only driven by money, so the drive to succeed will not disappear, but the excesses may be harnessed to the public good.

[TXfemmom]

None of these executives should be able to exercise those options, or they should be taxed at 50% when they do so.

Then, the government should force all the instittions to claw back all those bonuses given for profits and deals which were fraudulent in how they were valued from the very start, and all should have to be returned to the government.