Citigroup Halts Payouts to Former Execs

Compensation limits have prompted swift TARP repayment

(NEWSER) - A common complaint about the TARP bailouts was that by injecting capital and making the financial environment more friendly, the government wasn't doing enough to push the banks into real reform. Why wouldn't the banks simply live off TARP cash as long as they could? Yet those concerns were unfounded, writes Daniel Gross, because it turned out the government did have an effective motivator: limits on compensation. More»

175 top earners will see pay cuts averaging 50%

(NEWSER) - President Obama’s pay czar will cut compensation for the 25 highest-paid employees at seven companies that took large amounts of government aid. The 175 executives will face salary reductions of 90%, but with other compensation elements added in, the total reductions average 50%. Ken Feinberg also will require the seven bailed-out firms to change the way they do business in an effort to discourage excessive short-term risk-taking. More»

(NEWSER) - The return of hefty profits on Wall Street doesn't mean that banks are returning to previous bad behavior, Tim Geithner insists. In an interview with the Wall Street Journal, the Treasury secretary says the big banks are safer now because "they're running with much less leverage," greater liquidity, and healthier balance sheets. "The weakest parts of the system don't exist anymore." More»

Firms paid more than they made: Cuomo

(NEWSER) - The financial crisis and government bailouts did little to change Wall Street’s executive compensation habits, New York's attorney general says. All nine banks given assistance by TARP paid out bonuses in 2008—well before any paid back government loans, according to a survey ordered by Andrew Cuomo. Goldman Sachs, Morgan Stanley, and JPMorgan Chase actually paid more in bonuses than the firms made for the year, the Wall Street Journal reports. More»

(NEWSER) - Citigroup will raise salaries for investment bankers and traders as much as 50% to offset a steep falloff in bonus pay and keep the company’s compensation package competitive, Bloomberg reports. Other employees, like those in the consumer banking section, will receive smaller raises. Citi, which took $45 billion in federal bailout funds, also plans to offer its employees stock options to keep them on. More»