THIS would be the reason why the government should not be allowed to bailout private companies and then tell them what to do, AND the reason we haven’t been able to trust the government and would be fools to continue to do so.
Feds threatened to oust BofA execs over Merrill deal
Government regulators threatened to remove top Bank of America executives if they backed out of a buyout of failing brokerage giant Merrill Lynch, and offered to provide taxpayer funds to compensate for Merrill’s poor performance, according to company records obtained by The Washington Times.
The documents – e-mails between bank executives and their outside attorneys as well as board meeting “talking points” prepared for then-Bank of America Chief Executive Ken Lewis – offer new insight into the hardball tactics that produced one of the biggest deals negotiated during the late 2008 global financial crisis, one that is still reverberating on Wall Street and in Washington.
They also underscore the fear shared by then-Treasury Secretary Henry M. Paulson Jr. and Federal Reserve Board Chairman Ben S. Bernanke that allowing the deal to fall through would mean a sequel to the collapse of Lehman Brothers, whose failure months earlier sent the world economy into a tailspin.
“It’s highly unusual for a government agency – let alone a Treasury secretary and a Fed official – to virtually order a company to do something like this under threat of removal,”said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at the Boston University School of Law. “It raises a fascinating question which is, if you’re Bank of America and you have a shareholder’s interests paramount in your mind, what is your liability if you go against those interests in the interests of the country?”
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UPDATE: 10.21.09
More Slippery Slope
Have you heard that GM can’t find a CFO?
Treasury Said to Set Pay Cuts for Aid Recipients’ Executives
Oct. 21 (Bloomberg) — The Obama administration will order seven companies that received the most government assistance to cut salaries of top executives by 90 percent on average, a person familiar with the situation said.
The Treasury Department’s announcement will come this week, the person said on condition of anonymity. Total compensation, including bonuses and other benefits, for the 25 highest-paid executives must be reduced by about 50 percent, the person said.
So maybe this administration is tryingto destroy the big banks by helping them?
Pay rules complicate GM CFO search: report
CHICAGO (Reuters) – General Motors Co’s bid to find an outsider to replace its chief financial officer is being complicated by pay restrictions imposed on companies that got big U.S. government bailouts, The Wall Street Journal said on Saturday.
GM executives met recently with U.S. Treasury pay czar Kenneth Feinberg and left with the understanding the automaker would be able to offer a significant amount of stock but no more than a $1 million annual salary, the newspaper said, citing people familiar with the matter.
Sources have told Reuters that GM directors in September backed a plan for CFO Ray Young to leave the company.
GM emerged from bankruptcy in July after receiving $50 billion in emergency U.S. financing.
A spokesman for GM would not comment on whether the CFO search specifically was being hindered by the pay restrictions.
“We’ve consistently said that one challenge to filling any position from outside might be the pay restrictions,” GM spokesman Tom Wilkinson said.
We knew this was coming; the best and the brightest avoiding the government controlled companies for just this reason. I wonder how GM is going to pay us back when they go under for real?
The war to flip this country to socialism continues.
