The chances they cash in those IOUs this year are slim to none due
to the debt banks have incurred from the economic downturn. However,
over time the federal government's injections in these institutions
will most likely go toward paying these IOUs off.
IOUs cover
salaries, employee pensions, deferred compensation and of course the
widely debated and coveted Wall Street bonuses. The Journal has come up
with IOU figures "by looking at an amount they report as deferred tax
assets for "deferred compensation" or "employee benefits and
compensation." Here are some rough executive IOU figures the report
pinned down:
- $11.8 billion at Goldman Sachs Group Inc.
- $8.5
billion or more at J.P. Morgan Chase & Co. including compensation
at Washington Mutual Inc. and $1.7 billion for employee compensation at
Bear Stearns Cos.
- $10 billion to $12 billion at Morgan Stanley.
- $5 billion at Citigroup Inc.
- Bank
of America Corp. doesn't report, but Merril Lynch & Co. looks like it
primarily funded its own $2.2 billion deferred-pay obligation.
Obviously, the idea of taxpayers dolling out billions to big bank executives after bailing out institutions has many opponents.
As Dealscape's George White
pointed out,
there are a parade of lawmakers in the anti-bonus bandwagon, including
Speaker of the House Nancy Pelosi, Barney Frank, Henry Waxman and
Dennis Kucinich, Senate Majority Leader Harry Reid, Sen. Jim Webb,
Sen. Olympia Snowe and New York Attorney General Andrew Cuomo. Any new regulations lawmakers come up with could deter making future IOU debts more transparent or even punch a hole in golden parachutes, but in the meantime it looks like the taxpayers will be handing out the goody bags to cover these compensation packages.
- Maria Woehr
Comments
Trick or treat? It looks like bank executives will be knocking on taxpayers doors to cash in IOUs. The Wall Street Journal has determined that financial institution executives are supposed to cash in on more than $40 billion for their work in 2008. 
How is it defined that writing to cover the costs of unemployment benefits are socialism? Yet, covering the costs of For-Profit-Enterprises is not?
All I ever read about in the WSJ is republicans decrying any program that benefits the people; yet they have no problem whatever using tax dollars created by the hoi polloi to backstop businesses and businessmen who were not intelligent enough to generate profits.
Talk about your self-serving rhetoric!