Bank pay control, UNBELIEVABLE

[Steerpike]

Anyone who takes Uncle Sam's money is taking on reciprocal obligations. That includes the capping of salaries and benefits. Dude et al are flat wrong here, and simply can't admit that they have lost yet another point.

In general I agree, however not all banks were given a choice to take the money. Some were told they had to take it. I think the idea was to prevent the public from losing faith in banks that took money.

 

[Ame®icano]

Anyone who takes Uncle Sam's money is taking on reciprocal obligations. That includes the capping of salaries and benefits. Dude et al are flat wrong here, and simply can't admit that they have lost yet another point.

They didn't just take money, they exchange it for ownership in the company. Since government doesn't have over 50% of ownership in any of those banks, they can't make decision on their own.

 

[garyd]

Again they can do anything they want right up ntil the courts say otherwise. Right now one of these corporate honchos is going to have to grow a set and start working his way up the judicial hierarchy.
Other wise it isn't going to stop.

 

[Ame®icano]

Again they can do anything they want right up ntil the courts say otherwise. Right now one of these corporate honchos is going to have to grow a set and start working his way up the judicial hierarchy.
Other wise it isn't going to stop.

Government is not an owner of any bank that received TARP funds. Government is partial owner, they bought from banks preferred shares in exchange for taxpayers money. They authority in making decision for the bank is equal to their percentage in ownership.

For example, government (taxpayers) own 30% of CitiGroup. That gives them exactly 30% of votes in decision making. Rest of votes and decision making power belongs to other shareowners, including me who own CitiGroup shares. They cannot decide for me, they have no right. If they want that right, they have to own minimum of 50% +1 share and they own not even close to that.

 

[Care4all]

Again they can do anything they want right up ntil the courts say otherwise. Right now one of these corporate honchos is going to have to grow a set and start working his way up the judicial hierarchy.
Other wise it isn't going to stop.

Government is not an owner of any bank that received TARP funds. Government is partial owner, they bought from banks preferred shares in exchange for taxpayers money. They authority in making decision for the bank is equal to their percentage in ownership.

For example, government (taxpayers) own 30% of CitiGroup. That gives them exactly 30% of votes in decision making. Rest of votes and decision making power belongs to other shareowners, including me who own CitiGroup shares. They cannot decide for me, they have no right. If they want that right, they have to own minimum of 50% +1 share and they own not even close to that.

FYI

While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said.

Any such move would give federal officials far greater influence over one of the world's largest financial institutions. Citigroup has proposed the plan to its regulators. The Obama administration hasn't indicated if it supports the plan, according to people with knowledge of the talks.

When federal officials began pumping capital into U.S. banks last October, few experts would have predicted that the government would soon be wrestling with the possibility of taking voting control of large financial institutions. The potential move at Citigroup would give the government its biggest ownership of a financial-services company since the September bailout of insurer American International Group Inc., which left taxpayers with an 80% stake.

U.S. Eyes Large Stake in Citi - WSJ.com

 

[FactFinder]

Again they can do anything they want right up ntil the courts say otherwise. Right now one of these corporate honchos is going to have to grow a set and start working his way up the judicial hierarchy.
Other wise it isn't going to stop.

Government is not an owner of any bank that received TARP funds. Government is partial owner, they bought from banks preferred shares in exchange for taxpayers money. They authority in making decision for the bank is equal to their percentage in ownership.

For example, government (taxpayers) own 30% of CitiGroup. That gives them exactly 30% of votes in decision making. Rest of votes and decision making power belongs to other shareowners, including me who own CitiGroup shares. They cannot decide for me, they have no right. If they want that right, they have to own minimum of 50% +1 share and they own not even close to that.

In the case of AIG the government outright owns 2 divisions and has 70% ownership of the rest through preferred stock. I haven't looked up the percent of the rest but it is substantial.

 

[Toro]

It is important to note that 90% of the money used to bail out the financial system went to 7 companies, which are the companies subject to the pay cap. If the government hadn't bailed them out, these employees would be getting paid exactly $0 by the companies for whom they now work.

 

[garyd]

Please not however that prefered stock usually isn't voting stock. It is however stock that gets preferential treatment when it comes to dividends as best as I can rmember from my business class 30 years ago.

 

[Ame®icano]

Again they can do anything they want right up ntil the courts say otherwise. Right now one of these corporate honchos is going to have to grow a set and start working his way up the judicial hierarchy.
Other wise it isn't going to stop.

Government is not an owner of any bank that received TARP funds. Government is partial owner, they bought from banks preferred shares in exchange for taxpayers money. They authority in making decision for the bank is equal to their percentage in ownership.

For example, government (taxpayers) own 30% of CitiGroup. That gives them exactly 30% of votes in decision making. Rest of votes and decision making power belongs to other shareowners, including me who own CitiGroup shares. They cannot decide for me, they have no right. If they want that right, they have to own minimum of 50% +1 share and they own not even close to that.

FYI

While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said.

Any such move would give federal officials far greater influence over one of the world's largest financial institutions. Citigroup has proposed the plan to its regulators. The Obama administration hasn't indicated if it supports the plan, according to people with knowledge of the talks.

When federal officials began pumping capital into U.S. banks last October, few experts would have predicted that the government would soon be wrestling with the possibility of taking voting control of large financial institutions. The potential move at Citigroup would give the government its biggest ownership of a financial-services company since the September bailout of insurer American International Group Inc., which left taxpayers with an 80% stake.

U.S. Eyes Large Stake in Citi - WSJ.com

Government owns 36% of CityGroup.

First in October, and then again in November, the government made investments totaling $45 billion to prevent Citigroup's failure, but the company's fortunes and stock value have continued to decline.

Today, the Treasury Department and Citi announced a new plan in which the government will convert up to $25 billion of its loan money into common stock. In effect, the government will now own up to 36 percent of the company, making it the largest shareholder.

Government to Take Larger Ownership Stake in Struggling Citigroup

 

[garyd]

For further consideration controlling interest in a public entity is often significantly less than 50% and maybe as low as 20% or so depending on how widely dispersed a given companies common stock is.

 

[kyzr]

I fully support the governments "investment" in Citi, and less so in AIG. Citi is one of the world's largest banks, with many ME investors. AIG with its massive derivative schemes was, as Warren Buffet would describe..."dangerous".

The taxpayers will be fully repaid for their investment in Citi, with a tidy profit. With the alternative of letting them fail being a $trillion in tax deductions and about 100,000 unemployed. Making money and saving jobs is the only option.

I still say Obama would be wise to eliminate derivatives and other "non-job producing" investment alternatives. The object of the stock market is to provide capital for companies to grow and create jobs. Any investment instruments that do not provide capital to create jobs (derivatives, day-trading, etc.) should be taxed out of existence.

 

[editec]

the GOLDEN RULE is in effect.

Banks are whining because they are used to being the oes who ruled because they had the Gold.

Sucks to be them.