Banking Bonuses Under Fire


Summary: As many investment banks have been losing a lot of money over the past year, and are now receiving taxpayer money as part of the bailout plan, many US citizens have criticized high executive bonuses. In fact, many have been calling for top executives to either cut or completely forego their bonus. On October 29th, Representative Henry A. Waxman, who is leading a House investigation of the financial crisis, asked nine big banking companies on Tuesday to explain why they are paying billions of dollars in compensation and bonuses after they accepted cash injections of $125 billion as part of the government’s $700 billion bailout program. He ultimately questioned the apropriateness of depleting the capital that taxpayers contributed through exuberant bonuses. Mr. Waxman wrote letters to the chief executives of the nine banks that received aid, including Citigroup, Bank of America, Goldman Sachs and JPMorgan Chase. Waxman's investigation, along with public outcries from ordinary US citizens, has forced many banks drastically cut their bonus pool, and for top bank executives to forego their bonuses.

Useful Links & Resources:

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License