The Shock Doctrine
Disaster Capitalism in Action: executive compensation
Bailed-out Banks Continue Lavishing Perks on Employees
Eric Dash, New York Times, February 5, 2009
"Country club dues, gym memberships and personal assistants. Home security systems, chauffeur service and parking. And, of course, all those private jets to ensure the comfort and safety of the boss. Top executives at banks enjoy all sorts of shiny perquisites. Yet despite being propped up by taxpayer bailout money, many banks are not yet ready to give them up....
"Of 200 of the largest publicly traded banks that have received taxpayer money, about 61 percent, or 121 banks, paid an average of $10,835 in country club dues for their chief executive in 2007.
"Nearly three-quarters, or 147 banks, spent an average of $20,668 in car and parking expenses. Corporate jets, now one of the biggest targets of Washington’s ire, were financed by 36 banks, or 18 percent of those now receiving taxpayer funds. More often than not, the banks let their leaders use the corporate jet for personal travel, at an average cost of $102,216. And regardless of size, many banks said they were 'required' for the safety of the chief executive."
Bailed Out Banks Give $1.6 Billion to Executives
Frank Bass and Rita Beamish, Associated Press, December 22, 2008
"Banks that have their hands out in Washington this year were handing out multimillion-dollar rewards to their executives last year. The 116 banks that so far have received taxpayer dollars to boost them through the economic crisis gave their top tier of executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007, an Associated Press analysis found.
"That amount, spread among the 600 highest paid bank executives, would cover the bailout money given to several banks that have shared in the $188 billion that Washington has doled out in rescue packages so far.
"Some banks trimmed their executive compensation in the face of faltering performance that foreshadowed the current economic crisis, but they still granted multimillion-dollar packages. Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found."
Senator: Executive Pay Limits in Bailout "Are All but Gone"
Amit R. Paley, Washington Post, December 15, 2008
"Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules. But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.
"Now, however, the small change looks more like a giant loophole, according to lawmakers and legal experts. In a reversal, the Bush administration has not used auctions for any of the $335 billion committed so far from the rescue package, nor does it plan to use them in the future. Lawmakers and legal experts say the change has effectively repealed the only enforcement mechanism in the law dealing with lavish pay for top executives. 'The flimsy executive-compensation restrictions in the original bill are now all but gone,' said Sen. Charles E. Grassley (Iowa), ranking Republican on of the Senate Finance Committee....
"Congressional leaders are also concerned that the Treasury might simply choose not to enforce the rules or be unwilling to impose financial penalties that could further weaken a firm and send the economy deeper into a tailspin."
BusinessWeek Questions if Astronomical Salaries for CEOs of US Oil Firms Due to Performance or High Oil Prices
Moira Herbst, BusinessWeek, June 17, 2008
"Energy chief executives got raises last year much bigger than in other industries. Was it pay for performance—or pay for high oil prices?....
"Executive compensation for the CEOs of the 12 largest U.S. oil outfits rose by 5.8% from 2006 to 2007, from a median of $14.6 million to a median of $15.4 million. That's more than four times the increase of compensation for S&P 500 CEOs, whose median increased by 1.3% from 2006 to 2007, or $8.7 million to $8.8 million....More striking than the rate of pay increases for executives is the size of bonuses. For U.S. companies studied, total bonuses increased by 71% year over year, from $2.1 million in 2006 to $3.5 million in 2007. Over the same period, bonuses for chief executives overall in the S&P 500 shrank 4.9%, from $1.93 million to $1.84 million....
"Equilar also analyzed compensation of top energy executives of non-U.S. companies. While making less than their American counterparts, these 13 executives saw their median compensation increase by 85.8% from 2006 to 2007, from $4.8 million in 2006 to $8.9 million in 2007."
