Results tagged “bonus”

They say he runs the city like a business, so it's only fitting that after a poorer-than-expected performance in last week's election, Mayor Bloomberg's campaign workers are afraid they won't get big bonuses this year. In past elections, the billionaire former bond trader and media mogul has paid out-of-pocket bonuses of as much as $400,000 — "a highly unusual perk in municipal politics, a world not typically associated with lavish pay," the Times reports. But after defeating Democratic rival Bill Thompson by just 4.6 percentage points, campaign workers are starting to worry about paltry bonuses.

Good news all around today! The unemployed will probably get another five months to choose a barrel-and-suspenders combo that doesn't make their butts look big, and a new study shows that Wall Street holiday bonuses are set to return to pre-recession levels. So everybody's happy, and there's no need for any pitchfork riots or bricks through Park Avenue windows. Go Yankees!

If it's November, it's time to start dreading the Holiday tipping ritual. How much do you give the super or the doorman or—no joke—the sanitation worker? Well, if you're the board of directors at a tony co-op, the solution is simple: Nothing. A thread on the Urban Baby message board has sparked a vigorous debate about noblesse oblige during a recession, beginning thus:

SANTA CLAUS CAME EARLY!!! Just got a notice from our co-op board: "In response to past complaints about favoritism, and in light of the current recession that has dealt a significant blow to many of our shareholders, the board of directors of (XYZ Building) has implemented a strict "no tipping" policy for the building staff." THANK YOU SANTA!!!

Bank of America, which had posted a $3.2 billion profit last quarter, announced a $2.2 billion loss—$1 billion due to consumer defaults (CNN Money: "more and more Americans found themselves out of work and unable to keep up with their loan obligations") and paying the government and another $1.2 billion due to shareholder dividends. Departing CEO Ken Lewis said, "Obviously, credit costs remain high, and that is our major financial challenge going forward."

Federal Judge Jed S. Rakoff rejected the $33 million settlement that the Securities and Exchange Commission accepted from Bank of America over the $3.6 billion in bonuses paid to Merrill Lynch employees. BoA, which acquired Merrill, knew Merill was about to post $9 billion in fourth quarter losses yet went ahead with the bonuses; Rakoff found that BoA "materially lied" to shareholders about the losses.

Merrill Lynch's decision to hand out extravagant bonuses last year— as it was about to lose $15 billion in the final quarter—continues to cause problems for Bank of America, which acquired Merrill. Even though the Securities and Exchange Commission (you know, the agency that was supposed to keep tabs on Madoff) settled a lawsuit against BoA for the bonuses, to the tune of BoA paying $33 million, a federal judge has refused to approve the settlement! The SEC complaint said that BoA lied about letting Merrill pay as much as $5.8 billion in bonuses (Merill paid out $3.6 billIon), leading Rakoff to point out that if BoA did in fact break the law, then there's "something strangely askew in a fine of $33 million." He added that both companies "effectively lied to their shareholders... Do Wall Street people expect to be paid large bonuses in years when their company lost $27 billion?"—$27 billion is the amount that Merrill lost. And when a BoA lawyer pointed out that much of the bonus money was shared by people making an average of $91,000/year, Rakoff said, "I’m glad you think that $91,000 is not a lot of money. I wish the average American was making $91,000."

We're running out of pigs-at-the-trough jpegs! After last week's news that the City Council is giving staffers approximately $3.9 million in "cost of living" raises, the Post has learned that a dozen council members showered their staffs with tens of thousands of dollars in bonuses at the end of the last fiscal year. According to the article, each council member gets $273,000 a year for expenses like rent and office supplies, and any unspent funds are supposed to be returned to the city. But an examination of financial records found that at least twelve council members transferred the leftover loot into their personal accounts in June, the last month of FY09. Councilman Kendall Stewart (D-Brooklyn) moved $30,000 on June 19th to give bonuses to eight to 10 staffers; he tells the Post, "Me turning back $30,000 and everybody else spending their money to give it to the staff, would that make any sense to do?" Well, if everyone else is doing it, why not? And Councilman Thomas White (D-Queens), who spread $38,000 in unused cash between five staffers, explains, "I have a very committed, dedicated staff. They work very hard."

After The Guardian reported, "Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms," it was taken as a sign that excess is back. But now the investment firm is denying the report, having its spokesman tell the media, "We won't know what our compensation benefit number is until the end of the fourth quarter, which is at the end of December." The firm did return $10 billion in TARP money to the government, adding in a letter, "Our return of the government's investment does not, in any way, end our obligations to the public interest." We guess we'll have to wait until next January for stories about $1000 bottles of wine and dropping cash on new condos and cars.

So, you know how there was a lot of populist outrage over AIG's $165 million in bonuses? Well, now, Politico reports that the number is now almost three times bigger: "In a response to detailed questions from Rep. Elijah Cummings (D-M.D.), the company has offered a third assessment of exactly how much it paid out in bonuses last year. And the new number, offered in a document submitted to Cummings on May 1, is the highest figure the company has disclosed to date. AIG now says it paid out more than $454 million in bonuses to its employees for work performed in 2008." Politico points out that when it asked an AIG spokesman about bonuses, he gave them a $120 million number. The spokesman now says the $454 million “reflects all types of variable compensation across all of our businesses," while the $120 million was for folks at headquarters and other "high ranking officers."

Attorney General Andrew Cuomo revealed that most AIG executives who received big bonuses returned them. Nine of the top 10 recipients may return their money; casting a slightly wider net, 15 of 20 executives returned their bonuses, which accounts for $30 million of the controversial $165 million bonuses that the extremely bailed out insurer doled out. The NY Times reports, "Mr. Cuomo acknowledged that some bonus recipients declined to give back bonuses, especially those overseas who are outside the jurisdiction of New York State. He said he did not think it would be in the public interest to release the names of those who gave back their bonuses." About $80 million in bonuses were given to American employees, and Cuomo expects to get that money back.

Rep. Charles Rangel introduced the bill that would tax 90% of employee bonuses given by firms that received bailout money and excoriated the companies, "These people are getting away with murder. They’re getting paid for the destruction they’ve caused to our communities." Yet the NY Times finds that Rangel's relationship with Wall Street bullseye target-of-the-week A.I.G. is "complicated": "As recently as last year, he was trying to woo the company to donate $10 million to a school to be named in his honor. And while A.I.G. officials mulled the request, Mr. Rangel supported a provision in a tax bill that saved the company millions of dollars."

Mayor Bloomberg has a message for Attorney General Andrew Cuomo, who this week successfully sued to make public the names of 200 high bonus earners at Merrill Lynch & Co: None of your business! Speaking to reporters today, Bloomberg likened Cuomo's quest for details about employee bonuses to "snooping around." Never mind that the bonuses were paid out with taxpayer bailout money; airing dirty laundry is simply not done in Bloomberg's rarefied world. Now that rabble-rouser Cuomo has gone and subpoenaed AIG for its list of bonus recipients, and the mayor says enough's enough, arguing that if people work in the private sector, their bonuses shouldn't be public. "I don't think you'd be wanting somebody snooping around in your private life," Bloomberg added. Which sort of sounds like a threat, except it's already a reality.

As AIG weathers the bad PR storm from issuing over $165 million in bonuses to executives that helped bring the company down, the insurer has released the names of the companies and municipalities it paid out. The NY Times reports that AIG repaid "Goldman Sachs ($12.9 billion), Merrill Lynch ($6.8 billion), Bank of America ($5.2 billion), Citigroup ($2.3 billion) and Wachovia ($1.5 billion)" as well as foreign banks "Société Générale of France and Deutsche Bank of Germany, which each received nearly $12 billion; Barclays of Britain ($8.5 billion); and UBS of Switzerland ($5 billion)." California and Virginia each received about $1 billion each (NY is getting $210 million). You can see read AIG's statement (PDF)—the company used about two-thirds of its rescue funds for these payments. As for the bonus outrage, Rep. Barney Frank said these execs "may have a right to their bonuses. They don't have a right to their jobs forever," adding "it does appear to be that we're rewarding incompetence."

Do not mess with Attorney General Andrew Cuomo! Cuomo detailed his office's dealings with Merrill Lynch—namely how they asked Merrill what they were doing about 2008 bonuses in October but Merrill ignored them and apparently moved up their bonus schedule to spread billions in bonus money—in a letter to Rep. Barney Frank. You can read the letter (PDF) but here are some calculations: "The top four bonus recipients received a combined $121 million; The next four bonus recipients received a combined $62 million; The next six bonus recipients received a combined $66 million... Overall, the top 149 bonus recipients received a combined $858 million; 696 individuals received bonuses of $1 million or more." Cuomo also accused Bank of America, which bought Merrill Lynch, of being complicit in the bonus debacle.

Yesterday's report that Wall Street bonuses fell 44% last year had State Comptroller Thomas DiNapoli bemoaning all the income tax revenue lost by the belt-tightening. But today the Times takes the long view, and points out that those belts weren't really so tight when compared to previous years. Sure, last year's $18.4 billion in bonuses is less than half of the 2007 and 2006 take, but it was still the sixth-largest haul on record. Adjusted for inflation, Wall Street workers took home about as much as in 2004, when the Dow was soaring. (And those figures omit stock options that would push the numbers even higher.) Harvard Professor Lucian Bebchuk tells the Times he's concerned banks might be using taxpayer bailout money to subsidize the bonuses, which definitely calls for an angry torch mob or a sad trombone, take your pick.

The NY Times has been running a series of articles "exploring the causes of the financial crisis" and, for today's piece, it explores Wall Street bonuses. And how small groups of senior executives got very real bonuses when their companies' profits were imagined. The prime example is Merrill Lynch's bonus system: In 2006, $5-6 billion in bonus money was handed out; Dow Kim, who headed the mortgage business, made $35 million (99% in bonus money). "But Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value." A Harvard Law professor chimes in, "Compensation was flawed top to bottom. The whole organization was responding to distorted incentives.” Which brings us to the present: Credit Suisse is using "illiquid assets" to pay bonuses!

With the crappy year investment banks have been having, the NY Times reports government officials are freaking out about "what could be the biggest single-year decline in pay on Wall Street in history." It's believed that total bonus pay will drop "by $10 billion or more"--about a 30% drop from previous years--which means $10 billion less in all sectors of business, from real estate to local shop purchases. That, coupled with news that NYC's growth rate has slowed down, is alarming. City Comptroller William Thompson said, "we’re hitting a period where [city growth] would be stagnant," and deputy state comptroller for NYC Kenneth Bleiwas said, "The greatest risk to the city’s budget is the extent and the depth of the slowdown, particularly as it affects Wall Street. Nobody knows how long it will take to get through this mess.”