“Banks: We are making loans after bailout” Senate panel concerned money is going toward compensation, acquisitions Story posted by msnbc.msn.com
I’m sure quite a few companies are trying to do a lot of CYA (cover you’re a… ) in the light of stories like the AIG fun fair trip to Phoenix.
“Some of the nation’s largest banks sharing in the $700 billion government bailout of the financial industry tried to assure lawmakers Thursday they are using the money to make more loans and help financially strapped homeowners avoid foreclosure. Barry L. Zubrow, chief risk officer with JP Morgan Chase & Co., told the Senate Banking Committee that a portion of the $25 billion capital infusion it received from the Treasury Department was being deployed to “expand the flow of credit” and to assist with rewriting residential mortgages for up to 400,000 families”
What is nice to know also covered in the article that some of the companies were asked if the TARP (Troubled Asset Relief Program) was going to employee compensation (ie. Executive bonuses) and the answers were a blatant NO.. Whether or not this is true is yet to be seen, but at least they are putting their best foot forward for the media. They kinda have to seeing that they have to answer to the share holders.
““The committee has asked whether (bailout) funds would be spent on executive compensation,” said Jon Campbell, regional banking president for Wells Fargo & Co. in his testimony. “The answer is no. Wells Fargo doesn’t need the government investment to pay for bonuses or compensation.” Some of the executives said bonuses this year will be lower because of the economic downturn. “Employee compensation will be dramatically affected by changes in the overall economic and financial environment and our performance for the full year, but it certainly will not increase as a result of receiving TARP (Troubled Asset Relief Program) funds,” said Gregory Palm, general counsel for Goldman Sachs. Bank of America’s board has decided that this year’s bonus compensation pool will be reduced by more than 50 percent, Anne Finucane, a marketing and corporate affairs executive, told the committee.”
From what I take here with all of the companies reporting layoffs left and right at least these folks a stating they will cut their compensation packages. But I look at it this way better to have the job still then not.