Tags: US | Cuomo | Bank | Bonuses

New York's Cuomo Asks 8 Bailed Out Banks for Bonus Information

Monday, 11 Jan 2010 01:03 PM

New York Attorney General Andrew Cuomo is asking the nation's eight biggest banks to reveal how much they plan to pay out in employee bonuses for 2009.

Cuomo told reporters Monday that he also wants to know how the size of the banks' bonus pool would have been affected if the banks hadn't received a taxpayer rescue at the height of the financial crisis in late 2008.

The move comes as Wall Street banks this month prepare to hand out near-record compensation for last year's peformance.

"The banks made a lot of money, in some case only because taxpayers gave them a lot of money," Cuomo said.

Banks and the government are bracing for an expected public outcry over bonuses, in light of the industry's role in the near collapse of the financial system and recession.

While some bonuses may this year contain a larger percentage of stock, to reduce any temptation to take outsized risk, large payouts are likely to provoke the ire of Congress, governance critics and shareholders.

This may be especially true for Goldman Sachs Group Inc., Bank of America Corp. and other companies that accepted billions of dollars of federal bailout money, regardless of whether the money has been repaid.

Bonuses typically comprise the bulk of annual compensation for the most highly-paid bankers and traders, regularly reaching seven-figure and, occasionally, eight-figure sums.

"It does seem really ridiculous," Christina Romer, chairwoman of the White House Council of Economic Advisers, said on CNN's "State of the Union" on Sunday.

"You would certainly think the financial institutions that are now doing a bit better would have some sense," she went on. "This big bonus season, of course it's going to offend the American people. It offends me."

Many banks, in contrast, say high payouts are necessary to keep top talent who might otherwise defect to rivals.

A congressional commission is expected on Wednesday to begin a hearing into causes of the financial crisis, including whether the desire for high pay drove outsized risk-taking.

Speakers are expected to include Bank of America Chief Executive Brian Moynihan, Goldman Chief Executive Lloyd Blankfein, JPMorgan Chase & Co. Chief Executive Jamie Dimon, and Morgan Stanley Chairman John Mack.

Cuomo last year demanded that Bank of America and other banks disclose more details about their bonus payments.

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New York Attorney General Andrew Cuomo is asking the nation's eight biggest banks to reveal how much they plan to pay out in employee bonuses for 2009.Cuomo told reporters Monday that he also wants to know how the size of the banks' bonus pool would have been affected if...
US,Cuomo,Bank,Bonuses
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2010-03-11
Monday, 11 Jan 2010 01:03 PM
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