China's new weapon: Low executive pay

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Congress lookin' into bailout money used to pay bonuses...

Turning Up the Heat on Bailed-Out Banks Over Bonuses
October 28, 2007 - Congress joins the chorus asking if execs will still receive bonuses this year.

Democratic lawmakers are joining the chorus of Americans asking how slumping banks could hand out executive bonuses during the worst economic crisis since the Great Depression. Following a letter from Rep. Dennis Kucinich (D-Ohio), House Oversight and Government Reform Committee chairman Henry Waxman (D-Calif.), has opened an investigation into the matter, according to a release from his office. In letters to the heads of nine major U.S. banks getting propped up with billions of taxpayer dollars, Waxman said he "question[s] the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record."

Those banks have spent or set aside $108 billion to pay out bonuses to top executives, Waxman said, referencing the firms' public filings. The bonuses would reportedly range from around $100,000 for a lower-level employee to over $1 million for senior employees. Experts have said the payouts will be plumper than they would have been in such a disastrous year because of the taxpayer money flowing into the institutions.

Financial personnel experts have said the bonuses were necessary to retain top talent. Last week, House Financial Services Committee chairman Barney Frank (D-Mass.), called for a moratorium on executive bonuses. "If nobody gave them, there wouldn't be a competitive aspect," he told Bloomberg News. Sen. Bernie Sanders, I-Vt., has also called for a ban on executive bonuses at the banks.

More ABC News: Turning Up the Heat on Bailed-Out Banks Over Bonuses

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Finally...

Wall Street execs to lose bonus payments
Thursday 6th November, 2008 - Senior executives on Wall Street are resigned to the fact their bonuses will be cut well back this year.

Falling revenue and political pressure have caused some firms to warn of bonus reductions of up to 70 percent.

Apart from the executives, whose pay is disclosed in public documents, other financial workers will lose by between 10 percent and 45 percent this year.

Rewards are likely to decline even more in 2009 as business slows further.

Wall Street execs to lose bonus payments

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How to limit CEO pay: hire more women
Thursday, November 6, 2008 - Women get paid less. No news flash there.

What's a little more interesting in The Corporate Library's look at how much money male and female CEOs make is that women actually have higher base salaries, but lose out overall once bonuses, perks and other cash incentives are added in. The research, by Paul Hodgson and Greg Ruel, used data for 80 female and 2,621 male CEOs of Russell 3000 companies. The median base salary for women was $611,000, while men came in at $590,000. For total annual comp, men beat women $1.1 million to $975,200.

But—and this is going to verge on seeming equitable—female-led companies didn't do as well in terms of total shareholder return. Nearly 36% percent of firms with men at the helm outperformed the S&P 500 from 2005 through 2007, while only 28% of companies headed by women did.

Hodgson and Ruel say that performance differential isn't enough to explain the entire disparity in total comp. But add in a few more data points—like the fact that women, on average, have a shorter tenure at the top—and maybe the gender gap isn't nearly as big a deal as we think. Unless, of course, you consider the fact that only 3% of the CEOs in the sample were female in the first place, and women, generally speaking, make up half the population.

Source

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If they tied performance to pay, he have to pay `em to work there...

AIG chief slashes salary to $1
November 25, 2008: Top executives agreed to a series of pay restrictions, including canceling bonuses, as the troubled insurer struggles to stay afloat.

AIG Chief Executive Edward Liddy agreed to slash his annual salary to $1 as part of a series of voluntary pay restrictions by top executives tied to a massive $150 billion government bailout. AIG will also forgo bonuses this year and eliminate pay increases through 2009 for the firm's top executives. Liddy will get paid $1 per year for 2008 and 2009, with his compensation consisting entirely of equity payments. While he will not receive bonuses during those years, he will be eligible in 2010 for "extraordinary performance." He will also be ineligible for severance payments.

"This action by the senior management team demonstrates not only that we understand our obligation to taxpayers and shareholders, but also that we are committed to the future success of this organization," said Liddy in a statement. In addition to Liddy, Paula Reynolds, whom AIG hired as chief restructuring officer in October, will receive no salary or bonuses in 2008. From 2009 onward, any compensation above her base pay will be tied to the progress of AIG's restructuring.

"It is only fair that top executives, who benefit the most when firms do well, should also bear the burden of the difficult economic consequences their firms now face," said New York state Attorney General Andrew Cuomo in response to a letter from Liddy informing him of the pay cuts. Cuomo had voiced concern about AIG's expenditures in October after it was reported that the company had spent $440,000 on a weekend meeting at a resort. Subsequently, AIG immediately cancelled 160 events, worth an estimated $8 million.

Government help:

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Obama: Bank execs should skip bonuses
26 Nov.`08 - In ABC interview, says they should make sacrifices along with workers

President-elect Barack Obama thinks bank executives should forgo their bonuses this year to show they are taking responsibility amid difficult economic times. In an interview with Barbara Walters to air Wednesday, Obama also said he is trying to keep his BlackBerry or find another way to "break through the isolation and the bubble that exists around the president." Obama talked about a range of topics in Tuesday's interview, including troop deployments in Afghanistan and Thanksgiving holiday plans with his family, ABC News said. He also discussed the adjustment of moving into the White House with his wife, Michelle, and their two daughters.

According to excerpts of the interview released by ABC, Obama said bank executives should make sacrifices because so many other people are struggling as the U.S. economy slips further. Some financial firms, including Goldman Sachs, the Swiss bank UBS and the British bank Barclays, have said they are not handing out annual bonuses to top executives, and Obama encouraged more to follow. "I think that if you are already worth tens of millions of dollars, and you are having to lay off workers," Obama said, "the least you can do is say, 'I'm willing to make some sacrifice as well, because I recognize that there are people who are a lot less well off, who are going through some pretty tough times.'"

Obama also said the heads of the three auto companies who came to Washington asking for a bailout are a "little tone deaf" to what's going on in the country. It was the second time this week he has had harsh words for Ford Motor Co., Chrysler LLC and General Motors Corp. The struggling companies are pressing Congress for $25 billion in government loans. During a news conference Monday, Obama said the Big Three may deserve some assistance, but taxpayers cannot be expected to blindly support an auto industry "that has been resistant to change."

More http://www.msnbc.msn.com/id/27919666/

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Yes, the job market stinks — and it could get worse...

Job market is awful, but may get worse
5 Dec.`08 - Sharp jump in unemployment shows the economy is rapidly weakening

Friday’s report showing the biggest monthly job loss in 34 years confirmed forecasters' worst fears that the decline in the U.S. economy accelerated in November, after the financial system seized up and consumers hunkered down. As the government scrambles to break the downward spiral, some economists are predicting the unemployment rate is headed substantially higher through next year.

Since the start of the recession in December 2007, the economy has lost 1.9 million jobs, lifting the number of Americans out of work to 2.7 million. At 6.7 percent, the jobless rate has now risen 2.3 percentage points since it bottomed in March 2007. Most sectors of the economy are now losing jobs, including manufacturing, construction, financial firms, retailers, and the leisure and hospitality industries. Only government, education and health services managed to post job gains.

Friday’s report also slashed another 200,000 jobs from the numbers already reported for September and October — a sign that the economy was hit harder than first reported when the credit crunch deepened. Economists, who had been expecting a loss of some 350,000 jobs last month, were stunned by the news, describing the report as “horrendous,” "horrific" and “eye-poppingly bad.” “We’re scrambling around here for historical parallels,” said Robert Barbera, chief economist at ITG, an investment advisory firm.

More Job market is awful, but may get worse - Eye on the Economy- msnbc.com

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Work really may be bad for health, survey says
Fri., Dec. 5, 2008 - 1 in 5 say their job adversely affects how they feel

Sick of your job? You're not alone, according to an international survey that found nearly a fifth of employees say their work makes them ill or unhealthy. The online survey, by global recruitment firm Kelly Services, polled about 115,000 people in 33 countries in Europe, Asia and the Pacific and North America this year. On average, 19 percent of respondents globally said their job was adversely affecting their health, with an additional 13 percent saying their work was so stressful it was making it hard for them to sleep at night.

"In economies everywhere, people are spending more time at work, sometimes at the expense of personal health and wellbeing," said the Kelly Global Workforce Survey. "A significant number of people also believe that the state of their health is at risk because of workplace conditions. Not only do employees see their health being affected, but they expect employers to actively address the issue," it said.

Japan, where employees have committed suicide due to the stress of too much work, 60 percent of respondents said they had suffered from work-related health problems. Canada had the second-highest percentage of employees who said their health was affected, while employees in New Zealand, India and Australia were among those least affected.

More Work really may be bad for health, survey says - Health care- msnbc.com

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Granny says tell `em to sell their luxury planes...

Wall Street still flying corporate jets
21 Dec.`08 – Crisscrossing the country in corporate jets may no longer fly in Detroit after car executives got a dressing down from Congress. But on Wall Street, the coveted executive perk has hardly been grounded.

Six financial firms that received billions in bailout dollars still own and operate fleets of jets to carry executives to company events and sometimes personal trips, according to an Associated Press review. The jets serve as airborne offices, time-savers for executives for whom time is money — lots of money. And some firms are cutting back, either by selling the planes or leasing them. Still, Wall Street's reliance of the rarified mode of travel has largely escaped the scorn poured on the Big Three automakers.

Insurance giant American International Group Inc., which has received about $150 billion in bailout money, has one of the largest fleets among bailout recipients, with seven planes, according to a review of Federal Aviation Administration records. "Our aircraft are being used very sparingly right now," AIG spokesman Nicholas J. Ashooh said. "I'm not saying there's no use, but there's very minimal use." To cut costs, AIG sold two jets earlier this year and is selling or canceling orders for four others.

Five other financial companies that got a combined $120 billion in government cash injections — Citigroup Inc., Wells Fargo & Co., Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley — all own aircraft for executive travel, according to regulatory filings earlier this year and interviews. A cross-country trip in a mid-sized jet costs about $20,000 for fuel. Maintenance, storage and pilot fees put the cost far higher.

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