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Bank executives get ‘ill-advised’ bonuses, and keep them

Keep these two thoughts in mind as you read this article:

First, Dr. Robert Hare estimates that 1 percent of people would be diagnosed as psychopaths using his Psychopathy Checklist-Revised. However, Dr. Hare also estimates that 3 percent of corporate executives are psychopaths. That means there are three times as many psychopaths in corner offices than there are in the general population.

Second, you can’t get a psychopath to do anything by appealing to his or her conscience, morals or sense of shame. The only way to possibly influence psychopathic behavior is consequences (and sometimes that doesn’t work either).

Knowing this, I was angry and frustrated to read this story in the paper a few days ago: Pay czar will not fight banks on $1.6B in exec pay.

Financial meltdown

Remember the financial meltdown? Less than two years ago, the financial system of the United States was on the verge of collapse. To bail out big banks, insurance companies, and a few other gigantic companies, Congress approved $700 billion for the Troubled Asset Relief Program, or TARP, late in 2008. Early in 2009, Congress passed restrictions on executive compensation at companies that received TARP money.

Why? Because while tax dollars were being used to prop up these financial companies, the financial companies turned around and paid more than $2 billion in bonuses to their highest earners.

Nearly 80 percent of that money was unmerited, according to Kenneth R. Feinberg, appointed to investigate the matter as the government’s special master for executive compensation. And what is he going to do about it?

Nothing.

Stuck holding the bag

Here’s how this story was reported on the Huffington Post:

Though acknowledging the massive payouts were “ill-advised” and exhibited “bad judgment” — some bankers were paid more than $10 million, he said — Feinberg refused to rule that any of the massive payouts went against the public interest.

“As a matter of fairness, to label these payments years later as contrary to the public interest, with all the consequences that might roll from that?” Feinberg asked. “No, I don’t think that would be right.”

Asked what consequences could arise from recouping public funds, Feinberg replied:

“The consequences might be lawsuits, private lawsuits — a huge threat if I made that finding. Congress might very well be more willing to intervene if there was such a finding. This might go on. There might be a new chapter. There still might be a new chapter — I don’t know.

“But I’m trying to minimize the likelihood that today’s decision will trigger another round now of investigations and litigation. I’ve tried to strike that balance.”

That balance Feinberg struck means bailed-out bankers get to keep their loot while taxpayers are left holding the bag.

So why didn’t Feinberg go after the guys who took home millions? Apparently, he was afraid of endangering the financial recovery. “Certain aspects of the financial system still confront fragility,” he said, according to the Associated Press. “I’m not looking to compound that fragility beyond what I thought was necessary.”

Shaming the banks

Feinberg thought that publicly shaming the banks was punishment enough. Plus, of the 17 banks that he identified as paying unmerited bonuses, 11 of them had already paid back the TARP money.

Well, if shaming is all that can be done, let’s shame them. Here they are, as identified by the New York Times:

Companies that paid excessive compensation, but have fully repaid their bailout money:

  • American Express
  • Bank of America
  • Bank of New York Mellon
  • Boston Private
  • Capital One Financial
  • Goldman Sachs
  • JPMorgan
  • Morgan Stanley
  • PNC Financial
  • US Bancorp
  • Wells Fargo

Companies that paid excessive compensation, but have not yet fully repaid their bailout money:

  • A.I.G.
  • Citigroup
  • CIT Group
  • M&T Bank
  • Regions Financial
  • SunTrust Banks

No consequences

I don’t know if any of the overpaid executives are psychopaths. But they certainly seem to feel overly entitled to take such huge payouts when their companies were failing and the entire economy was disintegrating. After all, they could have turned down the bonuses.

This scenario is so typical of psychopathic maneuvering. These people managed to back the entire economy into a corner. They got their money, and then, even when society viewed their greed as wrong, even when restitution was justified, the man who could do something decided that going after them was just too risky.  Either that, or it’s the good ol’ boys network again.

So the overpaid executives exploit their companies, exploit the taxpayers and exploit the economy, and suffer no consequences.

Sigh. It’s all so dishearteningly familiar.



45 Comments on "Bank executives get ‘ill-advised’ bonuses, and keep them"

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  1. SageeGirl says:

    ErinBrock:

    Oh, no. You must be “out west” as we say here in the southeast!

    Funny how many coincidences there are though! I was going to offer to be there for you if you ever needed anything, but it would take me a couple days to get there! But, that can be arranged too!

    Who is Brianna Dennison?



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  2. Buttons says:

    EB in Washoe territory………..now, I am truly envious. I’m in GAS territory, dammit!



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  3. ErinBrock says:

    The past few years it seems like the wild wild west!!
    🙂



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  4. pollyannanomore says:

    I was just about to mention the BP Golden Handshake debacle.

    I am speechless with outrage at the audacity of this payment after so much scrutiny and coverage of the disaster by the media of the world.

    He should be jailed as a mass murderer = how many countless animals and birds have been maimed, injured and killed by this man? Yet he gets millions and another nicely paid position in the organisation.

    In my line of work if you make a couple of minor muckups – you get fired. Why should it be different at the upper reaches of management?



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  5. Sarah999 says:

    The most successful psychopaths wear a “very good” mask . . so how can anyone say 3% or 5%. . . of CEO’s etc are psychopaths. The successful ones, haven’t been exposed. I believe that it’s more like 3% of CEO’s are NOT psychopaths. (but that’s just me . . . . and a few others!).



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  6. OxDrover says:

    Polly and Sarah000,

    THE policy for BP is to SILENCE the alarms for fire and bad gasses, not just on that ONE rig, but on several that I have heard about recnetly so what would you do to a person/company who turned off the fire alarms in say their chain of theaters or chain of anything, and then when there was a fire and 11 people died? You would charge the person who made that decision with murder, and anyone who knew about it and did nothing with conspiracy and put them in prison.

    Instead they get 10 million $ a hand shake and a pension and moved to SIBERIA! Man, what a punishment.

    psychopathic company culture run by psychopaths! But no one goes to jail or prison over it….it’.s just business.



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  7. ErinBrock says:

    Here is a good artice, based on the workplace, yet it applies to any toxic personality in our lives.
    Exerpts from the article by Warren Camp esq.

    http://www.highconflictinstitute.com/index.php?option=com_content&view=article&id=138&Itemid=101

    HOW TO RECOGNIZE A HIGH CONFLICT JOB CANDIDATE: TIPS FOR SHARPENING YOUR “HIRING RADAR”
    The best pre-employment predictor of high conflict personality employees remains informed appreciative inquiry and engaging in meaningful, reflective listening.

    Most high conflict personality employees exhibit the following common behaviors (Eddy 2008):

    1. Rigid and uncompromising thinking.

    2. Unable to accept or heal from loss.

    3. Negative emotions dominate thinking.

    4. Unable to reflect on their own behavior.

    5. Difficulty empathizing with others.

    6. Preoccupied with blaming others.

    The following are key questions designed to elicit these behaviors in prospective employees:

    1. Why did you leave your last job?

    2. What about the job before that?

    3. How did you get along with your co-workers?

    4. Tell me about a time when you had a conflict with a co-worker and explain how you resolved it?

    5. Imagine two times you had difficulty getting co-workers or employees to use your very good ideas.
    Tell me exactly how you handled them to get them to use yours ideas?

    Beware of answers such as:

    “They didn’t understand me”

    “There was someone who had it in for me.

    ”RULE OF THUMB: REMAIN SKEPTICAL AND PROBE DEEPER



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  8. Ox Drover says:

    Dear EB,

    Great link and post!!! If we would interview prospective lovers as well as we would a prospective employee we might have had better success in our love live. 🙂 LOL



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  9. skylar says:

    I haven’t read many of the comments yet, but I do want to mention that all the money that was paid back, was paid in devalued dollars, because the printing of more money just devalues the currency. So they got 2008 dollars but paid back 2010 dollars. Sick. Even with interest, does it really add up? or is it just an interest free loan?

    Oxy,
    I saw your post on the pigs and farmers. You are so right. That is the one thing that makes me most grateful to the sociopath: I can now see sociopathy in our government and corporations and my family. Everywhere and everyone that seeks to gain control, the root is sociopathy. Drama and control — two huge red flags.



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