TARP Recipients and their Bonuses

February 5, 2009 2:17pm by Barry Ritholtz

These are really three different issues: 1) The CEO compensation; 2) Commission/P&L bonuses of profitable employees; 3) Misaligned compensation packages of the CDO/mortgage-backed buying managers.

The first one is a symbolic issue (and is irrelevant IMO) and the second one is perfectly appropriate — its the 3rd one that has become so problematic.

2007senior-officer bonuses/ total bonus pools*		Bailout money	2008 Bonus Pools
Merrill Lynch	$85M/$9.5B	$10B	Reportedly, in December, just before Bank of America took over, John Thain quietly awarded $3 to $4 billion in bonuses, a month earlier than was customary.
Bank of America	$36M/$11.3B	$15B	The company granted 2008 retention bonuses to 6,200 Merrill brokers, and C.E.O. Ken Lewis declined to answer a question about this year’s bonuses at a shareholder meeting in December.
Goldman Sachs	$313M/$12.1B	$10B	Average compensation is reportedly down 45 percent in 2008 but will actually be a greater share of revenues than in 2007.
Morgan Stanley	$64M/$9.9B	$10B	The firm’s 2008 bonus pool is down 50 percent but is still estimated at $5 billion.
Citigroup	$54M/$20.7B	$45B	The ratio of compensation to revenues is reportedly not remarkably different for 2008.
Wells Fargo	$40M/$8B	$25B	C.E.O. John Stumpf and top executives have not said they will forgo their 2008 bonuses as of mid-January.
J. P. Morgan Chase	$91M/$13.6B	$25B	While net income was down 64 percent in 2008, bonuses are reported to be down only 30 to 50 percent.
Total	$683M/$85.1B	$140B
Total of top five bonus packages (including stocks) received by highest-ranking officers. *Estimated as 60 percent of compensation where exact figures are not available.

Source:
Bonus Babies: The Big Tarp Recipients and their Booty
Christopher Bateman
Vanity Fair, February 2, 2009, 10:00 AM
http://www.vanityfair.com/online/politics/2009/02/bonus-babies-the-big-tarp-recipients-and-their-booty.html

Wall Street’s $18.4 Billion Bonus
Michael Shnayerson
Vanity Fair, March 2009
http://www.vanityfair.com/politics/features/2009/03/wall-street-bonuses200903

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