Bailed out TARP execs cashed in with fat paychecks

Not that we didn’t know about a lot of this already, but this new report shows just how much the companies bailed out by TARP controlled the process of payouts. Only one (of 69) top execs of this group made less than $1 million. Not bad for a bunch of failures and welfare queens.

There’s a mistaken idea in America that business executives earn what the market offers, and that’s just how it is.  But this is false. We’ve known for a long time that the game has been rigged, often through a generous system of executives building their own board, and offering each other board seats to ensure a comfortable living.

Compared to global competitors, the US executive pay is by far the highest yet as we know, the results are hardly impressive. It makes it difficult to compete globally when so many leaders are so out of touch with the rest of the world, but that’s another story.

US tax code was specifically written to help create this situation and somehow – surprise, surprise – this is ignored while Washington talks about cutting for everyone else. Executives and bootlickers for the rich like Paul Ryan so often talk about how the US tax law is so much more expensive than the rest of the world, but this is so painfully misleading.

money corporate ceo wall street 1% tarp

Money via Shutterstock.

For starters, the executives are costing US companies a lot more than competitors, as I mention above. Add on other costs (healthcare, retirement) and the cost of doing business is not necessarily cheaper everywhere else, as they say. It’s hardly accurate to pull out one part of the equation and ignore everything else. European companies will often talk about their high social costs, but they too are pressing for reductions in their costs with their respective governments.

As for the TARP bailout queens of the Fortune 500, how sick is this report? If ever a report screamed “revolving door” without saying it specifically, here it is. Why else would government officials mostly accept the pay suggestions of these companies? It’s not like bloated pay did much to help keeping them all out of trouble, so why keep throwing money at these people?

If you can stomach it, read the entire article that details how they were supposed to pay, which was already bad enough. Absolutely pathetic and disgraceful.

The report, authored by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), accused the Treasury of over-relying on the company’s claims when determining the size of paychecks, “effectively relinquishing” some of its authority to the companies it is monitoring.

“The Office of the Special Master’s [for TARP Executive Compensation] job is to look out for the interests of taxpayers, which it cannot do if it continues to rely to a great extent on the companies’ proposals and justifications without conducting its own independent analysis,” the report stated.

The Treasury approved all 18 pay-raise requests it received in 2012, ranging from $30,000 to $1 million. It also approved pay raises for executives at branches of companies that were either on the brink of bankruptcy or posting significant losses.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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8 Responses to “Bailed out TARP execs cashed in with fat paychecks”

  1. Naja pallida says:

    It’s kind of scary to think that with the budget path we were set on by President Clinton by the end of 2000, projections at the time were that we would have had the national debt paid off within 13 years, and still been able to implement a modest tax cut in the 350 billion dollar range (which Clinton proposed in his 2000 State of the Union address). Well, it’s 2013. Above all, I want to know where my flying car is, but secondarily, I want to know where my balanced budget is.

    Granted, no matter who was President, 9/11 most likely would have still happened, which would have resulted in some kind of action in Afghanistan. Now if it were a measured approach involving real intelligence gathering, and a surgical strike, like what actually ended up getting Osama bin Laden, instead of an all out war and occupation, it may not have resulted in running up the public credit cards. We could have skipped Iraq altogether.

    The roots of the 2008 economic bubble were blown in the Reagan era, and each successive President, including Clinton, had a huge puff at it, so it would have happened as well. But if the federal government was in a better fiscal position, we could have afforded to take our time and negotiate the terms of the bailout with the banks. Limited payoffs to failed executives, forced to-big-to-fail institutions to break up into manageable pieces instead of using TARP money to get even bigger, and actually make a profit off of our investment in the banks.

    The auto industry most likely would have also come to the brink of failure, but again, if the government was in a better fiscal situation we could have afforded to address them in a more pro-active way, and maybe, just maybe, made a profit instead of having the supposedly fiscally responsible people crying to get out at 50 cents on the dollar.

    Sure, there is always fuzzy math involved in budget projections, and even postulating about what could have been. It is unlikely that the debt would have been eliminated, even without these factors, but what one cannot deny that we would have been a lot better off had better fiscal decisions been made. Instead of giving away the farm to which ever large corporation, war monger, or billionaire came to the government with their hand out.

  2. rmthunter says:

    I don’t think they’re that aware. They seem to think that sort of “compensation” is simply what they’re due because of who they are. Can you say “Mitt Romney”?

  3. rmthunter says:

    “Only one (of 69) top execs of this group made less than $1 million.”

    Well, I bet he feels like a real loser.

  4. BeccaM says:

    Government of the plutocratic oligarchy, by the plutocratic oligarchy, for the plutocratic oligarchy…

  5. hollywoodstein says:

    That is enforced.

  6. hollywoodstein says:

    There oughta be a law.

  7. ComradeRutherford says:

    The sole reason the GOP agreed to TARP was because it was a class warfare transfer of wealth from the taxpayers to the CEOs as a reward for their near-destruction of the economy and the misery that inflicted on hundreds of millions of Americans.

  8. nicho says:

    They are laughing at us.

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