NewsTrust - Corporate Governance - Most Recent Stories: News (Mainstream)

Why Keep Geithner?

Mon, 02 Nov 2009 00:00:00 -0800

MSNBC - By Dylan Ratigan - Nov. 02 (News Analysis) - A year ago it was revealed to the American people that our banking system was a legalized Ponzi scheme in which bank and insurance CEOs paid themselves billions of dollars in personal compensation to lend and insure assets with money they didn't have

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Debates: Executive pay

Wed, 28 Oct 2009 00:00:00 -0700

Economist - Oct. 28 (Other) - Debate statement: "This house believes that on the whole, senior executives are worth what they are paid."

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During Crisis, Paulson’s Calls to Goldman Posed Ethics Test

Sun, 09 Aug 2009 00:00:00 -0700

New York Times - By Gretchen Morgenson, Don Van Natta Jr. - Aug. 09 (News Analysis) - Months after Henry M. Paulson Jr. left office, questions linger about the former Treasury secretary’s interactions with Goldman Sachs during the financial crisis.Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.

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CEOs paid more even as profits fall

Sun, 09 Aug 2009 00:00:00 -0700

Baltimore Sun - By Jamie Smith Hopkins - Aug. 09 (Special Report) - Chief executives of public companies have long had a ready answer when criticized about high pay: It's all about company performance. That argument has been put to the test by the toughest financial environment since the Great Depression. If performance is the standard, many of the Baltimore area's top-earning executives seem to be on shaky ground. To see how last year's financial crisis and worsening recession affected pay, The Baltimore Sun analyzed the 20 companies in the metro area that paid their CEOs at least $1 million. Seventeen reported increases in their chief executives' compensation, even though just as many firms ended their fiscal year with lower-priced stock - substantially lower, for the most part.

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$100 Million Payday Poses Problem for Pay Czar

Sun, 02 Aug 2009 00:00:00 -0700

New York Times - By David Segal - Aug. 02 (News Report) - In a few weeks, the Treasury Department’s czar of executive pay will have to answer this $100 million question: Should Andrew J. Hall get his bonus? Mr. Hall, the 58-year-old head of Phibro, a small commodities trading firm in Westport, Conn., is due for a nine-figure payday, his cut of profits from a characteristically aggressive year of bets in the oil market. There is little doubt that Mr. Hall is owed the money under his contract. The problem is that his contract is with Citigroup, which was saved with roughly $45 billion in taxpayer aid.

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Some E-Books Are More Equal Than Others

Fri, 17 Jul 2009 00:00:00 -0700

New York Times - By David Pogure - Jul. 17 (News Report) - This morning, hundreds of Amazon Kindle owners awoke to discover that books by a certain famous author had mysteriously disappeared from their e-book readers. These were books that they had bought and paid for—thought they owned. But no, apparently the publisher changed its mind about offering an electronic edition, and apparently Amazon, whose business lives and dies by publisher happiness, caved. It electronically deleted all books by this author from people’s Kindles and credited their accounts for the price. This is ugly for all kinds of reasons. Amazon says that this sort of thing is “rare,” but that it can happen at all is unsettling; we’ve been taught to believe that e-books are, you know, just like books, only better. Already, we’ve learned that they’re not really like books, in that once we’re finished reading them, we can’t resell or even donate them. But now we learn that all sales may not even be final. As one of my readers noted, it’s like Barnes & Noble sneaking into our homes in the middle of the night, taking some books that we’ve been reading off our nightstands, and leaving us a check on the coffee table. You want to know the best part? The juicy, plump, dripping irony? The author who was the victim of this Big Brotherish plot was none other than George Orwell. And the books were “1984” and “Animal Farm.

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Bankruptcy Judge Approves GM Sale

Mon, 06 Jul 2009 00:00:00 -0700

Washington Post - By Tomoeh Murakami - Jul. 06 (News Report) - General Motors won permission late Sunday night from a federal bankruptcy judge to sell its assets to a new government-backed company, setting the stage for the largest U.S. carmaker to complete a historic restructuring plan that is at the heart of the Obama administration's efforts to overhaul the ailing auto industry.

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Historic Overhaul of Finance Rules

Thu, 18 Jun 2009 00:00:00 -0700

Wall Street Journal - By Damian Paletta - Jun. 18 (News Report) - President Barack Obama urged policy makers to rewrite the rules governing U.S. finance, unveiling far-reaching proposals that would affect nearly every aspect of banking and markets. The White House hopes Congress can complete work on the plan by year's end. But it is sure to face opposition both from some on the right who say it threatens to throttle free markets and others on the left who say it doesn't go far enough. Some in Congress are cautioning against haste.

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Regulators Feud as Banking System Overhauled

Sun, 14 Jun 2009 00:00:00 -0700

New York Times - By Stephen Labaton, Edmund L. Andrews - Jun. 14 (News Report) - Two of the nation’s most powerful bank regulators were once again at each other’s throats. At a public meeting three weeks ago, John C. Dugan, the comptroller of the currency, blasted a proposal to impose stiff new insurance fees on banks as unfair to the largest banks, which he regulates. The financial crisis stemmed in part from problems at small banks, he insisted. Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation and the regulator for many smaller, community banks, could barely hide her contempt. The large banks, she said, had wreaked havoc on the system, only to be bailed out by “hundreds of billions, if not trillions, in government assistance.” She added, “Fairness is always an issue.”

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Restraints on executive pay: Attacking the corporate gravy train

Fri, 29 May 2009 00:00:00 -0700

Economist - May. 29 (Special Report) - Strict limits on performance-related pay at banks could also do more harm than good. One reason American business has thrived for so long is that its leaders have had a stronger incentive to perform well than those of other countries (see chart 1). Limiting the ability of financial institutions to pay sensible bonuses will simply prolong their woes. Edward Liddy, who was brought in to run American International Group (AIG) after the ailing insurer was rescued by the government, recently gave warning that executives cannot be expected to toil 24 hours a day without being adequately compensated for doing so. Mr Liddy, who plans to leave AIG once a successor has been found, cut his base salary to $1 a year in November 2008 following howls of protest over the pay of bosses at firms that had received bail-outs.

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Sitting Pretty

Sun, 24 May 2009 00:00:00 -0700

Los Angeles Times - By Kathy M. Kristof - May. 24 (Special Report) - If ever there was a year that you'd expect the state's top corporate dogs to get hit in the wallet, 2008 would be the one. The stock market crashed, bankruptcies soared and millions of workers were sent packing -- at a time when public outrage over excessive pay for top executives reached an all-time high.

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President Obama signs law to allow Pentagon to scrap defense contractor projects with cost overruns

Fri, 22 May 2009 00:00:00 -0700

New York Daily News - By Kenneth R. Bazinet - May. 22 (News Report) - "I reject the notion that we have to waste billions of taxpayer dollars to keep this nation secure," Obama said in a Rose Garden ceremony. "When it comes to purchasing weapons systems and developing defense projects, the choice we face is between investments that are designed to keep the American people safe and those that are simply designed to make a defense company or a contractor rich," he added. Read more: http://www.nydailynews.com/news/politics/2009/05/22/2009-05-22_president_obama_signs_law_to_allow_pentagon_to_scrap_defence_contractors_project.html#ixzz0GGsn1fRm&B

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Advanta's painful plastic surgery

Mon, 18 May 2009 00:00:00 -0700

Fortune - By Colin Barr - May. 18 (News Report) - The credit card business has grown so wretched that one major issuer is clipping its customers' cards and giving its investors a haircut. Advanta (ADVNA), the nation's No. 14 card issuer and a top lender to small businesses, said last week it will shut down its card business to stem losses. The move is a momentous one, because credit cards bring in nearly all Advanta's revenue. The company will close customer accounts next month, leaving a million borrowers looking for credit at a time when lenders are pulling back. And Advanta's small-business customers aren't the only ones in limbo: So are the investors whose bond purchases financed Advanta's expansion over the past decade.

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Google is accused of UK tax avoidance

Mon, 20 Apr 2009 00:00:00 -0700

The Guardian - By Terry Macalister - Apr. 20 (News Report) - Google has joined the list of companies facing criticism over tax avoidance after public accounts showed it paid only £600,000 in UK corporation tax despite local revenues of more than £1.25bn.

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The Mindset of an AIG executive

Wed, 25 Mar 2009 00:00:00 -0700

Business Week - By Diane Brady - Mar. 25 (News Analysis) - A few things struck me in the “resignation letter” of Jake DeSantis, an executive vice president of the American International Group’s financial products unit. (People don’t normally forward their letters of resignation to The New York Times) First, of course, is his justified sense of outrage at having been abandoned by his boss, AIG chief Ed Liddy, before Congress and at having his bonus essentially taken away. “Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.” But a few other sentences stand out in my mind as emblematic of the mindset that has created some of this mess.

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Costco, Starbucks, Whole Foods Offer Compromise on Union Bill

Sun, 22 Mar 2009 00:00:00 -0700

Bloomberg - By Holly Rosenkrantz - Mar. 22 (News Report) - Starbucks Corp., Whole Foods Market Inc. and Costco Wholesale Corp. are offering a compromise on union-backed “card-check” legislation that U.S. business groups are spending millions of dollars to defeat. The legislation, known at the Employee Free Choice Act, would allow employees to form unions by signing cards rather than through a secret-ballot election. Under the compromise being sought by the three companies, management could still demand a secret ballot election, and the provision of the bill that requires binding arbitration for union contracts would be dropped. Penalties would be increased for companies that take action against workers before union elections and refuse to participate in collective bargaining.

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AIG fallout burnishes some, taints others

Sun, 22 Mar 2009 00:00:00 -0700

The Hill - By Michael O'Brien - Mar. 22 (News Analysis) - After a week of talk over controversial bonuses handed out to executives at AIG, those on the winning and losing end of the political fallout are either licking their chops or licking their wounds while wondering how long bonuses will dominate the news. An eclectic group of winners may be hoping that bonuses at AIG and other companies stay in the headlines after showing their political potency last week. Perhaps the foremost beneficiaries are two Republican, would-be lawmakers who have targeted their opponents over the bonuses, and House Speaker Nancy Pelosi, who seized on the AIG news and shifted the focus away from the House.

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Bailout King AIG to Pay Millions in Bonuses

Sun, 15 Mar 2009 00:00:00 -0700

Washington Post - By David Cho, Brady Dennis - Mar. 15 (News Report) - Insurance giant American International Group will award hundreds of millions of dollars in employee bonuses and retention pay despite a confrontation Wednesday between the chief executive and Treasury Secretary Timothy F. Geithner. But the company agreed to revise some executive payments after what AIG's leader, Edward M. Liddy, called a "difficult" conversation. The bonuses and other payments have been exasperating government officials, who have committed $170 billion to keep the company afloat -- far more than has been offered to any other financial firm.

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A.I.G. Planning $165 Million in Bonuses After Huge Bailout

Sun, 15 Mar 2009 00:00:00 -0700

New York Times - By Edmund L. Andrews, Peter Baker - Mar. 15 (News Report) - The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to 400 executives in the same business unit that brought the company to the brink of collapse last year.Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

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Treasury Demands AIG Cut Bonuses; $165 Million Looms

Sun, 15 Mar 2009 00:00:00 -0700

Bloomberg - By Hugh Son, Robert Schmidt - Mar. 15 (News Report) - American International Group Inc., the insurer saved from collapse by a $170 billion taxpayer bailout, was ordered by the U.S. Treasury to scale back its $1 billion plan to give retention pay and bonuses. AIG agreed to reduce some retention payments in 2009 by 30 percent and tie bonuses to the company’s recovery, according to a person briefed on the matter and a letter from AIG Chief Executive Officer Edward Liddy. The New York-based insurer still plans to distribute about $165 million on March 15 because of legally binding contracts, said the person, who declined to be identified because the talks weren’t public.

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Madoff pleads guilty to all charges

Thu, 12 Mar 2009 00:00:00 -0700

MSNBC - By AP Story - Mar. 12 (News Report) - Saying he was “deeply sorry and ashamed,” Bernard Madoff pleaded guilty Thursday to pulling off perhaps the biggest swindle in Wall Street history and was immediately led off to jail in handcuffs to the applause of his seething victims in the courtroom.

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Harvard Medical School in Ethics Quandary

Tue, 03 Mar 2009 00:00:00 -0800

New York Times - By Duff Wilson - Mar. 03 (Investigative Report) - A group of Harvard Medical School students and faculty are intent on curtailing industry influence in their classrooms.

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After Losses, a Move to Reclaim Executive Paychecks

Sun, 22 Feb 2009 00:00:00 -0800

New York Times - By Gretchen Morgenson - Feb. 22 (News Report) - Should executives get to keep lavish pay packages when the profits that generated their compensation go up in smoke? As the financial crisis deepens, what might have been a philosophical question is now the topic of the day. With losses mounting at the nation’s largest financial institutions, years of earnings have been erased, investors have lost billions, thousands of employees have been let go, and taxpayers have been tapped to rescue the financial system. But executives who helped set the problems in motion, or ignored them as they mounted, are still doing fine. Humbled, perhaps, but well paid for their anguish.

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Late Change in Course Hobbled Rollout of Geithner's Bank Plan

Mon, 16 Feb 2009 00:00:00 -0800

Washington Post - By NEil Irwin Binyamin Appelbaum - Feb. 16 (News Report) - Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face.

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For Bank of America and Merrill Lynch, Love Was Blind

Sun, 08 Feb 2009 00:00:00 -0800

New York Times - By Louise Story, Julie Creswell - Feb. 08 (Special Report) - Taxpayers are furious that Bank of America hit up the government for a second round of bailout funds in order to close the Merrill deal earlier this year, bringing its tab at the federal trough to $45 billion and potentially exposing taxpayers to further losses. Shareholders were shocked to see the stock of what was a solid retail banking operation recently trade below $5 a share. And Bank of America employees are angry that their own bonuses have all but evaporated because of what they see as Mr. Lewis’s mistakes.

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