|
Waxman wants banks to explain big pay bonuses |
|
By Silla Brush
|
|
Posted: 10/28/08 06:19 PM [ET] |
Congressional investigators led by Rep. Henry Waxman (D-Calif.) want banks participating in the federal government’s bailout plan to explain their compensation packages amid reports that they could pay out billions in bonuses this year.
Waxman, chairman of the House Committee on Oversight and Government Reform, sent a letter to nine banks that are receiving money as part of the Treasury Department’s $125 billion plan to invest directly in the banks.
He is requesting broad information about the banks’ compensation packages between 2006 and 2008, including the total amount of money they spend on salary and bonuses, and the number of employees who take home more than $500,000 overall. The banks include Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley and Bank of America, among others. Waxman also wants the firms to list the total compensation, including salary, bonus and benefits, of each of their top 10 employees.
“While I understand the need to pay the salaries of employees,” Waxman said, “I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry’s worst years on record.”
Waxman asked the banks to supply the information by Nov. 10. Rep. Dennis Kucinich (D-Ohio) also wrote Waxman to request that the committee look into similar information for City National and Key Bank.
“Some experts have suggested that a significant percentage of this compensation could come in year-end bonuses and that the size of the bonuses will be significantly enhanced as a result of the infusion of taxpayer funds,” Waxman wrote.
Also on Tuesday, in a letter to Treasury Secretary Henry Paulson, Sen. Jim Webb (D-Va.) expressed concern following media reports that the country’s top banks will be paying out roughly $70 billion in bonuses and executive compensation this year. “If taxpayers are being asked to make sacrifices to save our financial system, so should the institutions and individuals who helped to cause this crisis,” Webb wrote.
|
