Comments on: Insuring Bankers’ Bonuses

By: Defending A Peg: Lessons for the US Banking Authorities « The Baseline Scenario

Mon, 23 Feb 2009 19:37:35 +0000

[...] This would be a fine statement in many contexts. But there is now an obvious endpoint, which is very much on everyone’s mind – there is no point in pretending otherwise. Either banks will be taken over by the government – and then reprivatized (and I insist on immediate reprivatization) – or they will not. And “not” is fine with me, but this option is only persuasive if you can really explain how it is going to happen and provide a decent deal for taxpayers (given that this will effectively insure bankers’ bonuses). [...]

By: amit

amit — Tue, 17 Feb 2009 00:15:34 +0000

Limiting exec salaries and bonuses is just one part of a plan. Expense accounts, benefits, lobbying, and all other aspects of compensation must be explicitly controlled. In a phrase, these dogs must be spayed and neutered.

By: Bank bonus disgrace « Financial developments

Bank bonus disgrace « Financial developments — Mon, 16 Feb 2009 14:15:53 +0000

[...] UPDATE: an interesting take on the american solution [...]

By: Secretary Geithner’s Speech: A Viewer’s Guide « The Baseline Scenario

Tue, 10 Feb 2009 11:08:57 +0000

[...] compensation, Mr Geithner argued for – and won – very weak limitations (or, you might say, a generous insurance scheme for their future bonuses). And the NY Times is reporting that he also prevailed on whether bank executives should lose [...]

By: Links 2/6/09 | Bear Market Investments

Links 2/6/09 | Bear Market Investments — Sat, 07 Feb 2009 03:50:13 +0000

[...] Insuring Bankers’ Bonuses The Baseline Scenario (hat tip reader Tim) [...]

By: wally

wally — Fri, 06 Feb 2009 22:31:52 +0000

nemo,
Remember that the bankers got their tax cheat in where the health lobby failed. That should answer your question.

By: Nadine MacLane

Nadine MacLane — Fri, 06 Feb 2009 20:18:03 +0000

My question is similar to Nemo’s. Which economists agree with this methodology? I can see how bankers would agree with it. But does it “do the right thing” according to *any* of those who study the subject. If there are economists who agree, why do they think it’s a good idea?

By: Going to Heck in a Handbasket, Now With Financial Music Video | Red Hot Energy and Gold

Fri, 06 Feb 2009 15:13:00 +0000

[...] since the Obama administration seems to be as much in the pocket of Wall Street bankers (see HERE also) as the Bush administration, don’t expect Washington to listen to [...]

By: Greenman

Greenman — Fri, 06 Feb 2009 15:04:58 +0000

Vidal, Tomas Wiles–I concur this is primarily a political sidebar to the larger discussion. Truly: how many executives actually make more than $500k in salary? Probably only group presidents and above, so we’re talking about maybe a dozen or so people at any one company. Nevertheless, it seems an important element in restoring public confidence.

By: Moue Magazine » Blog Archive

Moue Magazine » Blog Archive — Fri, 06 Feb 2009 06:21:42 +0000

[...] Baseline Scenario (aka My New Favorite Blog) explains why the executive pay cap that Obama announced is less stern punishment for a misdeed and more “Your mother wants me to yell at you, so I’m going to raise my voice and you can slam your door. But we’ll meet in the kitchen later for ice cream”: As announced yesterday, the government will set restrictions on the pay of executives in banks that participate. But note that, under these rules, bonuses are not restricted. Instead, they are just deferred and paid in shares. In other words, if there is cheap recapitalization through government-provided insurance, these executives are getting an incredibly good deal. [...]

By: Tim Manni

Tim Manni — Thu, 05 Feb 2009 22:01:39 +0000

I think it will be quite interesting to see how this whole salary cap plays out. Part of me thinks there has to be at least some loop holes, mentioned and not, that will allow these execs to take home handsome salaries (like 500k isn’t a handsome salary already).

Also I want to see how the execs who the caps will impact react to the limitation. If integrity even exists anymore, it will say a lot about the company heads who stay on and stay proactive despite their salary reduction. It’s not like these guys don’t care about what they’re doing…

By: bob h

bob h — Thu, 05 Feb 2009 21:15:51 +0000

Why not dictate that bonuses be paid in subprime CDO’s?

By: Tomas Wiles

Tomas Wiles — Thu, 05 Feb 2009 20:39:23 +0000

greenmam: incentives are nicely aligned, mr. geithner is feeding his friends at the banks, and they will feed him later with an appointment similar to Robert Rubin, paying $120m over ten years in bonuses and, as mr rubin tells us, “I could have got much more”. I agree: only Volcker will quit.

By: polit2k

polit2k — Thu, 05 Feb 2009 19:40:05 +0000

I can’t see Volcker staying around, nor quiet, if this is it.

By: Readings 02/05/09 | Venture Capital Bloggers Network

Readings 02/05/09 | Venture Capital Bloggers Network — Thu, 05 Feb 2009 19:26:05 +0000

[...] Insuring Bankers’ Bonuses (Simon Johnson) [...]