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When I originally read about this, my jaw dropped. (From Daily Finance 3/27/09)
According to Bloomberg News, Charlotte-based BofA "plans to increase some investment bankers' salaries by as much as 70 percent following the takeover of Merrill Lynch & Co., people familiar with the proposal said." This is the same bank that got $45 billion in support from the federal government.
Pay for managing directors would climb to about $300,000 from $180,000 while less senior directors would increase to $250,000 from $150,000, and vice presidents would get $200,000, up from about $125,000, according to Bloomberg.
There's a good chance that Bank of America Chief Executive Kenneth Lewis is raising the salaries simply because he does not like being told what to do. When Wall Street raised concerns about the acquisitions of Merrill Lynch and Countrywide Financial, he basically ignored them. Earlier this week, he vowed to begin repaying its federal TARP money next month because he did not like the strings that came attached with it.
Some analysts have argued that the Charlotte-based bank, which lost $2.4 billion in the fourth quarter, should be nationalized, according to the Los Angeles Times. Some critics think Lewis is full of it.
The money is coming from the bailouts. B of A has no money to pay for salaries that doesn't come from the bailouts. I think President Obama is absolutely wrong to try to dampen anger at the banksters and the brokers. He should be leading the charge and using it to crack down on these scum.
There simply is no possible way anyone can actually earn a $300,000 salary. It's just plain skimming based on power relations. Apparently, the B of A leadership is trying to send a message that if people don't want scandalous bonuses, then they will get astronomical salaries instead.
Having lived in California where B of A originated, I remember their legendary arrogance and contempt towards depositors and the general public. They really had an Exxon-Mobile level of hubris. It's gotten even worse these days.
Any bank, participating in the bailouts or not, should lose its banking licenses and incorporation if they pay anyone $300,000 a year. That money either belongs to the taxpayers or the depositors. We should stop coddling the banksters.
An aside: I just noticed that the word "broker" starts with "broke." It fits as in bankrupt or to have broken something.
It is my understanding that B of A has promised to repay the bailout money by the end of this fiscal year. If that is the case then I really have no problems with a 300k salary. It is their call.
When I get pissed is when they pay idiots millions in bonus money for running a company into the ground. Especially the CEO's and such.
At the end of the day 300k is not that outrageous for a VP.
And the kind of stocks these banksters belong in are the medieval ones meant for hands and feet. Then place them out on the town square where they can be spat upon or treated to any other assorted humiliations.
I saw the granddaughter of the founder of BofA even said she was appalled by the behavior of the current bank board and how the bank now treats its customers.
BofA has gotten more arrogant since the merger with former Nations Bank and the relocation of the corporate headquarters from San Francisco to Charlotte.
The good, ole' boys mentality has floated to the top.
I went to college in Santa Barbara in the early 80s. The lore we lived with was that the Bank of Amerika in the small campus community of Isla Vista (IV) was burned down in 1970. A student was shot and killed at that time... it wasn't just Kent State and Jackson State.
Later a restaurant in IV had its ceiling painted with the view looking up toward the sky from the interior of the burned B of A, with blackened crumbling walls, twisted girders and a lot of blue sky.
The more I see the US economic situation unfold, the more irritated I get. How can banks previously begging for financial help are now dumping our tax payers’ money for non-economic recovery objectives? How can you Mr. BofA use our money to make you richer, when we are now hunting for jobs and trying to be smart with our spending? You are to blame for the “Global Financial Crisis” and now irresponsibly using the TARP funds to reward your executives. Do you know what the definition of stimulus means is? I don’t have a problem if you opt to reward your top executives for the job well done or try to make your institution stronger via key acquisitions and mergers; my biggest problem is to use our tax payer hard earned money to finance your idiotic executive’s decisions. How are you helping in reversing your mistakes; have you Mr. CEO know what business ethics means? Do you think you are morally permitted to continue acting irresponsibly?