Bailed-Out US Banks Gave Employees Billions in Bonuses in 2008, Report Says
Citigroup, one of the biggest recipients of US government bailout money, gave employees $5.3bn in bonuses for 2008, New York's attorney general said today in a report detailing the payouts by nine big banks.
The report from attorney general Andrew Cuomo's office focused on 2008 bonuses paid to the initial nine banks that received loans under the government's Troubled Asset Relief Program (Tarp) last fall. Cuomo has joined other government officials in criticising the banks for paying out big bonuses while accepting US taxpayer money.
Citigroup, which gave 738 of its employees bonuses of at least $1m, is now one-third owned by the US government as a result of its bailout. It paid bonuses of at least $3m to 124 of those employees, even after it lost $18.7bn during the year, Cuomo's office said.
The New York-based bank received $45bn in government money and guarantees to protect it against hundreds of billions of dollars on potential losses from risky investments.
Bank of America, which also received $45bn in Tarp money, paid $3.3bn in bonuses, with 172 employees receiving at least $1m. Of those, 28 received bonuses of more than $3m. Merrill Lynch, which Charlotte, North Carolina-based Bank of America acquired during the credit crisis, paid out $3.6bn.
Cuomo's office said Merrill Lynch doled out 696 bonuses of at least $1m for 2008, with 149 of those workers getting bonuses of at least $3 million.
Bank of America has been sharply criticised for its acquisition of Merrill Lynch because of mounting losses at the Wall Street bank and the size of bonuses Merrill paid its employees.
A spokesman for Citigroup was not immediately available to comment on the report. Bank of America did not immediately comment on the report.
But the banks have said they needed to pay their top performing employees to prevent them from defecting to competitors. Companies that accepted Tarp money have had to comply with government restrictions on employee compensation, including bonuses.
JPMorgan and Goldman Sachs, which have already repaid Tarp funds they received, paid out the most bonuses of more than $1m, the report said. However, they were considered among the healthiest of the bailed-out companies.
JPMorgan, which gave 1,626 employees of at least $1m, paid back the $25bn it received in Tarp money last month. Goldman, which repaid its $10bn in government money last month as well, gave 953 workers bonuses of at least $1m. The two banks each gave more than 200 employees bonuses of more than $3m.