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Should Year End Bonuses be Based on Performance?

Updated on March 26, 2010

Greed, Greed, and More Banker Greed

Remember this as you read this short articles. The Banks that are saying they are repaying their TARP funds have not actually repaid them, they are saying they are going to repay them… so they reward their executives… but reward them for what?

Or should you just pay yourself a bonus because you can? Citibank lost over $3 Billion Q3 2009 and now they are preparing to shell out the year end bonus money.

Conveniently Bank of America is repaying their TARP money. How? By borrowing more money from a different branch of Government and by issuing more stock. They don't actually have the money to pay. But the Executives in charge are going to get their year end bonuses no matter what. Why not announce repayment in January 2010? You know why.

Today Citibank issued a similar decree. They are going to repay their $45 Billion in Tarp Funds too.

Citi will sell $20.5 billion in stock and debt to repay the bailout funds.

Great they are going to dilute shareholder value to “pay back” the funds. Shareholder value will decrease 19%.

Even though it's good news for Citigroup and other banks, word of Citi's repayment sent its shares down 22 cents, or 5.6 percent, to $3.73 as investors reacted to the dilution that current shareholders will incur.

How is this good news? Well because Bank of America has paved the way... shown bankers how to continue to pay unwarranted executive bonuses in light of continual decreasing performance. That is good news right? The Banks don’t have the money to repay and are doing nothing more than shifting debt from one source to another the Government is just smiling and saying all is well. Way to go Team Obama. Are you going to buy any of the newly issued 4.3 Billion Shares of CitiBank?

Citibank is still losing money!

Citigroup reported a $101 million profit during the third quarter before accounting for $288 million in preferred stock dividends and the debt exchange offer that gave the government its stake in the bank. Including those costs, Citi lost $3.24 billion during the quarter ended Sept. 30.

And the Government is fine with the repayment based on a debt shift? Well those executives must be paid for their lack of performance!

Most of the largest banks quickly paid back the money they received because it carried restrictions such as caps on executive pay and dividends.

And the banks whose Executives are not above the TARP fund Executive pay limits are NOT repaying TARP funds. In fact banks like Wells Fargo are giving their executive salary raises and huge stock bonuses in lieu of bonuses.

Why is Team Obama in Such a Hurry to Accept these Baseless Repayments?

Citi had 22.86 billion shares outstanding as of Sept. 30. Based on Friday's closing price, Citi would need to sell about 4.3 billion shares to raise $17 billion. That would dilute current shareholders stake in the company by about 19 percent.

It’s all about the Spin. Nothing is being paid back. Will the Federal Government be backing the assets of these companies as they venture further into debt and even more risky behaviors?

How much is enough? When will Americans wise up, rise up, and take back control of the Money Supply?

If you can not see why the Federal Reserve MUST be abolished then this should help you understand. Bankers do not care about Americans, they care about themselves. If we continue to let Bankers call the shots we will continue down a path of complete and total economic destruction.

You can Not Pay Debt with Debt

These repayment scams are just another money grab before the crash. Banks are doing NOTHING to help Americans. When legislation is passed to help Americans they lobby against it, they fight it, they do everything they can to circumvent it. Banks are raising fees and refusing to loan money to businesses who need it. Banks are not working to help people avoid foreclosure they are seizing assets. Banks are the problem… more specifically the Central Bank (The Federal Reserve). Federal Reserve Policy allows the bilking of Americans to continue, because their member banks are owned by Corporate Shareholders. It's just another scam on the road they are paving to socialism.

One Last Thing to Think About

Not only is the Government acting irresposibliy to allow this to happen. The continue to funnel Billions of Dollars through these Bankers with every sale of assets, and with every issue ot Treasury Bills. The Federal Government is giving bankers on the front end, the back end, and allowing them to call the shots. For the Bankers control the Government. All the Team Obama posturing is just a facade.

No End to Greed?

Bankers are robbing America blind.
Bankers are robbing America blind.


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  • ethel smith profile image

    Eileen Kersey 8 years ago from Kingston-Upon-Hull

    Bonuses in the UK are a joke also. I always thought such treats were linked to performance? They usuallly are for us minions

  • profile image

    KellyEngaldo 8 years ago

    We have handed out bonuses to company after company, seen companies - even great companies fall with the "profits" given as the reason and the profits turn out "momentary profits" that disappear the next year. For the sake of national security, the huge bonuses must stop. Top performers deserve a reward, CEOs who live the company 24/7 are in a different category but still need to have long term accountability for those bonuses.

    Kudos to the CEOs taking only $1 in salary and growing the company long term. Kudos to the reporting of insider trading.

    But more needs to be done, the cycle of one year's worth of performance needs to end. We need a long term viewpoint before handing out bonuses. And we also need job creation. We must add job creation to the criteria.

    Until we know how to reward and do a good job of rewarding, rewarding for the long term, rewarding for beyond just one year's "profit", rewarding for real company growth, rewarding for job growth, capitalism will die.