Wall Street Welfare Reform

[marmar]

from OurFuture.org:



Wall Street Welfare Reform
By Terrance Heath

July 23rd, 2008 - 11:16am ET


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By the time a good idea makes it to Congress — and actually gets some serious consideration — it is no longer an idea whose time has come, but one whose time is way overdue. Such is the case as Congress takes up the issue of CEO pay, while staring in the face yet another expensive, and all but inevitable, taxpayer-financed corporate bailout.

Democrats and Republicans queasy about a federal rescue of mortgage giants Fannie Mae and Freddie Mac are coalescing around the idea of letting the government slap limits on the multimillion-dollar pay packages of their executives.

Seems reasonable, at a time when the government — with funds provided by you and me — is stepping in with a bailout that could cost upwards of $25 billion, and even $100 billion. It seems even more reasonable when considered alongside the reality that Freddie Mac's CEO made around $19.8 million in compensation even after the company's stock lost half its value. Fannie Mae's CEO didn't do so bad either, with a $12.2 million paycheck and a $2.2 million bonus.

Earlier this year, Congress dragged three of the biggest "subprime CEOs" in for a good talking-to about their compensation packages, which they got even after running their companies aground in mess that Congress is now attempting to clean-up with tax-payer dollars. (For example, Countrywide's Angelo Mozillo got bout $22.1 million 2007, and about $10 million in stock on his way out the door, when his company was sold to Bank of America in a sale approved by the Fed. Bear Stearns' James Cayne made about $232 million during the years his firm helped drive the subprime debacle, and got out just before the Fed ponied up guarantees of $30 billion to bet J.P. Morgan to buy it.) As far as anyone knows, the CEOs left with their ears burning, but their paychecks pretty much intact. ............(more)

The complete piece is at: http://www.ourfuture.org/blog-entry/wall-street-welfare-reform