No Rhyme or Reason: The Heads I Win, Tails You Lose Bank Bonus Culture

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No Rhyme or Reason: The Heads I Win, Tails You Lose Bank Bonus Culture is a report by Andrew Cuomo, New York Attorney General. [1]

The Los Angeles Times reported on July 30, 2009, "As Congress prepares to vote on potential new pay restrictions for banks, New York Atty. Gen. Andrew Cuomo today provided ammunition for those who say radical reform of compensation programs is overdue. Cuomo said his office’s probe into big banks’ pay plans of the last few years found 'no clear rhyme or reason' to them. 'When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well,' Cuomo said in a summary of the investigation. 'Bonuses and overall compensation did not vary significantly as profits diminished.' The attorney general’s report -- subtitled, "The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture" -- focuses in part on the 2008 bonuses paid by major banks that received government capital under the Troubled Asset Relief Program. He found that Citigroup Inc., for example, paid out $5.3 billion in bonuses for 2008 even though the bank lost $27.7 billion and needed $45 billion in TARP capital to bolster its balance sheet. A total of 783 Citigroup employees got bonuses of at least $1 million, Cuomo said." [2]

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