TARP recipients to get White House mandated pay cut

I’m no fan of the government telling a business how much it’s going to pay executives, but you have to say the major TARP recipients brought this on themselves. After the forced bailout (most of these players had no choice but to go along with the bailout) the situation became no longer business as usual. Somehow that point was lost on the C-level at Citigroup, BoA, GM, Chrysler, GMAC, Chrysler Financial, and especially AIG. The end result? The pay packages of 175 top executives are going to start seeing much lighter pay checks.

Cue an entire chorus of nanoscale violins.

From the link:

The Obama administration will soon order the nation’s biggest bailed-out companies to drastically cut the pay packages of 175 top executives, a senior administration official confirmed to CNN Wednesday.

Kenneth Feinberg, who was named the White House’s pay czar in June, will demand that each of the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, the official told CNN.

And here’s the big number:

Under the plan, which is expected to be officially released by the Treasury Department next week, annual salaries for executives at those seven firms are expected to fall 90%, on average, the official said.

C-level finds email most valuable

I’d hazard a guess most people, and not just executives,  find email either the top or tied at the top for the most valuable data on a hard drive.

Now for a casual user who  backs up nothing and has a priceless collection of photos or video email could come in second, but many ordinary users who do at least rudimentary backing up of documents, images and other like data fail to back up email folders, and even such mundane-seeming items such as favorites or cookies. After a failure all of these will be missed, probably more than realized.

Back to c-level executives, I can completely see where email is the most critical datato get back. The email inbox is truly a virtual inbox of work-to-do, information to process and documents to attend to. Losing that can be devastating. Too many executives allow the inbox or other email folders become the de facto storage spot for very important information.

Food for thought, and a lesson to remember — back up thoroughly and often.

From the link:

With so much valuable and confidential information in our inboxes, it’s no wonder 81% would recover that data first. There’s a strong legal argument for better backup, too. 

E-mail is the most valued business document, according to a recent survey from Kroll Ontrack Inc.

Kroll asked 200 business executives across Canada, the U.S. and Europe which business documents they would most prefer to recover in the event of data loss. Eighty one per cent reported they would save their mailboxes.

E-mail is of critical importance because it contains so much information, said Dave Pearson, senior storage research analyst with IDC Canada.

“Test contracts to vendors or clients, confidential memos … all sorts of work documents, process documents, presentations, sales materials, all those things pass through your e-mail at different times,” he said.

Large organizations, especially those subject to lawsuits, should have a centralized backup repository for their e-mail, Pearson suggested. “It just makes the discovery process so much easier and so much less expensive for them,” he said.

But many companies still lack a well-thought-out e-mail archival policy. “A lot of companies may not realize how much of their business is contained in their e-mail or how many confidential or important things are said in e-mail that they need to keep track of,” said Pearson.

Backing up e-mail is a high priority in the enterprise and a vital practice for IT, according to George Goodall, senior research analyst at London-based Info-Tech Research Group Inc.

E-mail is very much the lifeblood of any organization, he said. “Many people, especially executives, use e-mail as a knowledge repository … the problem is, it’s a very difficult thing to backup and more importantly, it’s difficult to restore.”

Wall Street Journal hits back at Obama’s exec cap

Not surprising. Some good points are made here, but the reality is this move is largely symbolic and if anyone thinks C-level compensation will actually significantly fall is deluded.

Base pay may be much lower, but overall compensation will still be there through all the loopholes that are wide open and easy to see already.

From the WSJ link:

The Obama administration had to do something. But capping executive pay at $500,000 at banks needing “exceptional assistance” could create as many problems as it solves.

First, it could distort labor markets. Employees and executives will be tempted to flee troubled banks to subsidiaries of foreign banks or stronger U.S. institutions. That could make the weak even weaker.

Second, the plan caps pay for top employees. It doesn’t yet address the arguably more important issue of generous pay structures lower down organizations. The cap could encourage those in, say, better paying jobs running big departments at an investment bank to shun top positions where pay would be limited.

Half million cap on bailout exec salaries

A bold move by Obama. Not sure if I agree with the government-imposed salary cap, but I do agree with the concept in spirit. If nothing else this might knock down the number of corporate begging hands out there.

Instead of stealing from taxpayers, some C-level execs might just think they can keep their salary and right the ship themselves. You know, let capitalism work the way it’s supposed to work.

From the link:

President Barack Obama on Wednesday imposed $500,000 caps on senior executive pay for the most distressed financial institutions receiving federal bailout money, saying Americans are upset with “executives being rewarded for failure.”

Obama announced the dramatic new government intervention into corporate America at the White House, with Treasury Secretary Timothy Geithner at his side. The president said the executive-pay limits are a first step, to be followed by the unveiling next week of a sweeping new framework for spending what remains of the $700 billion financial industry bailout that Congress created last year.

The executive-pay move comes amid a national outcry over huge bonuses to executives heading companies seeking taxpayer dollars to remain afloat. The demand for limits was reinforced by revelations that Wall Street firms paid more than $18 billion in bonuses in 2008 even amid the economic downturn and the massive infusion of taxpayer dollars.

“This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success,” Obama said. “But what gets people upset — and rightfully so — are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.”

Update — the Wall Street Journal hits back.

Thain digs grave a little bit more deep

One, why is he talking to anyone in the press? He has nothing to gain and is now a great case study in bad public relations.

Two, I will never understand why C-level incompetence is almost always rewarded. This ass clown will get another job , probably soon, with the keys to the bus, a foot on the pedal and a big cliff looming after his first twist of the steering wheel.

And our tax dollars will be there to bail him out again.

From the link:

Former Merrill Lynch & Co. Chief Executive John Thain defended the acquisition of the brokerage by Bank of America Corp., saying the bank knew of the company’s losses and bonuses before the purchase closed.

Thain also said he plans to reimburse Bank of America for a $1.2 million renovation of his office a year ago, saying in an interview with CNBC Monday that “it is clear to me in today’s world that it was a mistake.”

“I apologize for spending that money … on those things,” Thain said in the interview.

He made similar comments in a memo to employees released Monday by media outlets.

When asked why he made the renovations in the first place, Thain said during the CNBC interview that former Merrill Lynch CEO Stan O’Neal’s office “was very different than the general decor of Merrill’s offices. It really would have been very difficult for me to use it in the form that it was in … It needed to be renovated no matter what.”

“I should have simply paid for it myself,” Thain added.

Spokespeople at Bank of America and Merrill Lynch declined to comment on the office renovation reimbursement.