Bank of America’s executives won’t be seeing anything in the way of huge bonuses

October 23, 2009 – 2:30 pm – No Comment

Money from an ATM

Kenneth Feinberg is the pay czar that is in charge of how the banks that took bailout money are running. When Bank of America proposed to cut pay for its top executives and top paid employees, he gave his own proposal in which he insisted the cash part of their salaries are to be reduced by 94% from the levels they were in 2008.

The letter that Feinberg sent to Bank of America’s chief administrative officer, Steele Alphin, outlined exactly what would be going on with their pay. Here is the summary:

•Retention and guaranteed bonuses are prohibited.

•The majority of one’s paycheck must come in stock awards, which aren’t redeemable for two years.

•Base salary will not exceed $500,000 and on average will be 94% lower than in 2008.

•Total compensation (retirement, fringe benefits, bonuses) will be 62% less than in 2008.

•Long-term bonuses can be awarded, but only after review by the pay czar’s office, and such bonuses must be in the form of restricted stock not redeemable for three years and subject to forfeit if the employee leaves the bank.

•All bonuses can be “clawed back” if the employee is terminated for misconduct or financial statements supporting the bonus turn out to be inaccurate.

Source

Ok, so it’s unlikely that anyone that was making the huge amounts of money that the top executives making would be happy about rules set on how much money that they can make.

I am glad that the pay czar is setting rules on how much money these guys can make. If the banks weren’t operating on the taxpayer’s dollar then perhaps they could be trusted to do whatever they wanted, but are using federal money to pay their employees a crazy salary and huge bonuses, so they can’t be trusted.