Executive Pay

Nearly 40% of the Top Paid CEOs Bombed at Their Jobs

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The Institute for Policy Studies has released a no holds barred report on CEO pay, culture.  Even the study title screams outrage, Executive Excess 2013: Bailed Out, Booted, and Busted.  Every year there is a list of the top 25 highest paid CEOs and over the past 20 years this list has included 500 executives.  Of those 500 who made the Wall Street Journal's top 25 highest paid Chief Executive Officer list, a whopping 38% were utter failures at their jobs.

Outrageous Economic Shorts - There Is No STEM Worker Shortage

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Once again our daily barrage of economic injustice news is overwhelming.  From lobbyist lies to interest rate swap rigging to killing workers by the hundreds to our best and brightest working jobs flipping burgers, here are some quick economic news shorts that you don't want to miss.

 

Greedy Executive Pay Gets a Scolding and Not Much Else

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Where have we seen this before? The White House has a lot of talk. Then a pay czar is appointed. After some period, a damning report is issued. Then we have the public scolding, while legislation, policy and amendments are ignored and defeated, often by the very same administration.

Any action on the latest outrage du jour? Nah.

Such is the the Obama administration's pay czar's report. To be fair, the Pay Czar was given no power to actually get the ill gotten gains back. He also was limited to institutions who received TARP funds, not the real bail out going on at the Federal Reserve.

The Special Master for TARP Executive Compensation, Kenneth R. Feinberg, a.k.a. Pay Czar, was chartered to monitor executive compensation of bailed out financial firms. This covered 419 banks who received TARP funds. 17 of those banks handed out ill-advised executive compensation tallying $1.6 billion dollars. $1.6 billion dollars equals 26,666 $60,000 a year salaries. In other words, to feed the executive pig, 26,666 people went without a job.

FDIC Proposal: Link Banks Risk to Executive pay

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Earlier we mentioned the FDIC might take on executive pay.

Now the FDIC is asking for comments on this proposal.

The FDIC is seeking comment on how these types of risks should be accounted for when setting an institution’s risk-based assessment.

Employee compensation programs have been cited as a contributing factor in 35 percent of the reports prepared in 2009 investigating the causes of insured depository institution failures and the associated losses to the DIF.

Bloomberg reports the FDIC board vote.

FDIC may take on Executive Pay

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The headline, FDIC eyes linking levies to bank pay, is yet another media sound byte which might be yet another PR stunt with no action.

US banks’ contributions to a multi-billion dollar fund that insures depositors’ savings could be linked to regulators’ assessment of bank pay plans, under preliminary discussions being held by top banking watchdogs.

So, there is no commitment or comment. At least the FDIC is considering such a move, while Congress does nothing.

Friday Movie Night - The Fabulous Life of Wallstreet Brokers

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It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

This is almost silly but considering the move today by the Federal Reserve to limit executive pay, the below video, in the tacky genre of Lifestyles of the Rich and Famous might jar some reality on executive compensation.

The Fabulous Life of Wallstreet Brokers

 

May the Cayman Islands be so overloaded with rats it sinks

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It's not enough to run a financial institution into the ground, but when a nation tries to limit executive pay, bankers scurry like rats to the Cayman Islands:

A group of 45 bankers at Barclays yesterday bypassed potential curbs on pay and bonuses by jumping ship to set up a Cayman Islands company and manage $12.3 billion of Barclays’ most toxic debt. They will be paid at least $400 million over ten years (see Commentary, facing page).

In an exotic piece of financial engineering, the bank will lend $12.6 billion to Protium, a newly created Cayman Islands-registered hedge fund, to buy the toxic assets.

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