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.
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.