Bailout Recipients Subject to Criminal Penalties

LAT: Neil J. Barofsky, special inspector general for the Troubled Asset Relief Program, said his intent was to shed more light on the workings of the widely criticized program. He already has lobbied successfully to have all TARP award agreements and vendor contracts posted publicly online.

"We want to bring transparency to areas that previously were dark so the American people, who have invested so much, can see what's going on," Barofsky said.

He was to release a 188-page report today on his efforts since he was appointed two months ago. The report says Barofsky also will require senior bank executives to certify under criminal penalty their plans for complying with the executive pay limits that the Obama administration will impose on TARP recipients.
Read the executive pay rules here.

Wall Street Complains $500K Isn't Enough

Wall Street is complaining that they're not going to be able to keep workers because $500K is not enough. If that's the case, perhaps we should start teaching a core group of college students, who believe that $500K is more than enough, to take over these positions in a few years. More regulation and ethics need to be applied to the banking industry. Banks taking government money need to report all salaries and perks. I believe Obama said that's coming. What we really need to do is sweep out the current crop of Wall Street bankers.

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Geithner Calls Out Failed Executives-Reform On the Way

Geithner says next week he'll announce plans for substantial reforms to the financial services industry. More about executive pay caps, part of the reforms, here.

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Obama Caps Executive Salary at $500,000 Wall Street Whines

So the executives who ran their companies into the ground get $100,000 more than the president. It's a start. But Wall Street is already complaining. Heidi Moore at the Wall Street Journal says Americans just don't understand, that's not the way that Wall Street execs get paid.

But now there are little to no profits, and Wall Street bonuses are being called into question by everyone from Joe Six Pack to President Obama. So this year’s scuffles could easily escalate into a fight to the finish, with the infighting highlighting tensions among fiefs fighting for the long-time survival of their payouts.

I think we understand perfectly. If Wall Street doesn't like it, DON'T TAKE THE MONEY:

CNBC: The proposals drew a mixed reaction, from Washington to Wall Street to Corporate America..

“Golden parachutes and limits on pay fundamentally tie into whether you’ll be able to hire and recruit people to work at these large troubled companies. These new rules may make it difficult to recruit quality candidates in the future ," said Claudia Allen, who chairs the corporate governance group at Neal Gerber & Eisenberg, a Chicago-based law firm." However, this move is symbolic in that it sends a strong message to all companies, not just those receiving bailout funds. Obama is sending the message that companies need to focus on pay for performance." Obama's move comes amid public outcry over $18.4 billion in bonuses paid out in 2008 at a time when taxpayer money was shoring up the financial system.

Read the White House release on executive compensation.
Obama's statement.

Financial services industry pay in perspective from the Economic Policy Institute:

The financial services industry pays its chief executive officers (CEOs) more than any other industry, averaging $18,876,000 in 2007. The oil and gas industry, however, is a close second with average CEO pay of $18,406.000. Financial services is also the highest paid sector for CEOs if one examines the pay of the median CEO in each sector—the one whose compensation is greater than half but less than half of the other CEOs: the median CEO pay in financial services was $16,433,000 in 2007.

Read more.