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Bailout bonuses: Does the public have a right to know?

August 24, 2009

Is it anybody’s business how much money you make?

When it comes to Wall Street and the meltdown that whacked financial markets and emptied investors’ pockets, the normal rules of etiquette don’t seem to apply.

Wall Street salaries seem to be everybody’s business lately. Nevertheless, the Obama administration’s pay czar may try to keep a large portion of the compensation plans he is reviewing under wraps.

It’s Kenneth Feinberg‘s job to review salaries at the biggest corporate recipients of government bailout funds.

How much of his report will become public is the multimillion dollar question.

Privacy laws and fears that highly compensated executives will become targets for an angry public argue for limiting disclosure.

“One of my clients makes $25 million a year and drives a Honda,” said Steven Eckhaus, of Katten Muchin Rosenman LLP. “He tries to lead a fairly modest life and he would be horrified if what he makes appeared in the paper. Not only would his neighbors know, but his kids would know, and it would affect his ability to raise his kids. These are people, not a circus sideshow.”

Congressman Alan Grayson told Reuters he is unsympathetic to that argument.

“If this is the same top talent that caused their firms to be destroyed and put the entire U.S. economy at risk, I wish they would leave the firms and leave the country,” he said.

What’s your view?

Should top earners keep their privacy, or does the public have a right to know? Leave your opinion in the comment section below.



Incentive pay that rewards superior earnings are in the best interest of shareholders (owners) and make sense. However, Wall Street has created its own correllary to that idea, namely that when performance is horrible, bonuses still get paid because otherwise the so-called “talent” would leave and go work elsewhere.Setting aside the question of where “elsewhere” is when the global financial system is melting down, the bottom lines are that (1) it is always the right of shareholders to know what compensation is being paid; and (2) when taxpayer dollars are being put into companies, taxpayers become de facto shareholders and also deserve to know what compensation is being paid.

Posted by Jamie | Report as abusive

Incidentally, I am disgusted by the comments of Hubert M. Bug, in which he asserts that to disapprove of endless greed is a dishonor to American soldiers.Mr. Bug, soldiers like me do not fight and die to protect the profits of top executives. We serve to protect their families and country, out of duty to ideals that I see you hold in little regard.

Posted by Jamie | Report as abusive

It’s no different than a bank asking to see how much money you make in a month in order to secure a loan.We (the american taxpayer) are the bank in this instance as we are paying for this.I think we should have the right to know what these people are making as it’s our money we are giving them.It’s a no brainer.It think it’s very alarming to see that americans keep losing privacy (patriot act) and the upper eschelon of society seem to get more privacy.Remeber the golden rule:He who has the gold makes the rules.

Posted by Joe DeSalme | Report as abusive

I agree with smc; the compensation of private citizens receiving public assistance shouldn’t be disclosed. Though executive pay is what some would consider unfairly high, it’s not enough to bring a company down; there are other more significant root causes that have a greater contribution to failure, and creating hype and jealousy over the pay scale would only distract from addressing the real issues.I do think it’s fair to implement some transparency as to how companies spend public funds so as to guard against questionable investments, but then again I wouldn’t be against auditing students receiving grant money to ensure that the money is used for school either.Of course it’s now after the fact, but I’m opposed to the government bailout of private companies in general. All this talk of corporate greed and failing companies giving executive bonuses would be a non-issue if the companies were actually allowed to fail. Without a safety net, I think we’d see more responsible business decisions, and those executives that do run their companies into the ground for a short term gain would be unemployed and unemployable (what corporate board of executives would hire them?). Let ‘em fail, and in the case of banks let ‘em be responsible for maintaining enough capital to cover their customer’s accounts.

Posted by Nick | Report as abusive

Yes, we have a right to know.When public funds are used to bail them out, it is a no brainer that all the financial dealings of that entity be public knowledge until the bailout money is repaid in full.

Posted by Jim Smith | Report as abusive

I think we, the people, should a shout to:AFL/CIO, SEIU, Freddie Mac, Fannie Mae, UAW, NAFTA, NATO, etc for your significant contributions for our domestic free markets towards global expansion. Thanks to their sincere efforts, we now have China presiding as primary owner of our U.S Treasury bonds.

Posted by Sucram | Report as abusive

The salaries of academics at publicly supoprted colleges and universities are availabile to the public. I see no reason why (and the BS about the country being founded on the principle of anything you can rip off you deserve does not persuade me) that the salaries of (usually overpaid) CEOs, traders, etc on WS at firms that have been saved by tax dollars should not have their $$ published. The resistance to this is more telling than any argument they may make. It says, pure and simple, that they recognize they are engaged in theft and fraud. If they actually believed the right wing econobabble about value/talent/retaining key employees, they would have no hesititation in publishing this data.

Posted by Bill | Report as abusive

How about the excesses of Congress? How do 60,000 a week for traveling expenses for Mrs Pelosi sound?

Posted by a morrissey | Report as abusive

The CEO’s think that we as taxpayers who are supporting their bailouts shouldn’t know what they earn? Stockholders are told aren’t they, so when we are using taxpayer dollars to bailout these companies, then we become shareholders too.Now, I’m not disagreeing that these people work for free. But if they’re taking home a salary greater than $5M, then that’s too much. Sure, they had a bad year like the rest of us, welcome to the club. Hopefully they saved for their estates mortgage, or they could sell a few items down at the pawn shop or thrift store to make up the loss.

Posted by John P | Report as abusive

I want to see the full financial reports of everyone on welfare, everyone who draws social security, everyone of Medicare etc etc. After all, they are taking “our” taxpayer money right? So, if we are going after companies with that reason, why not these people as well?


Of all the stupid ideas.The majority of tax income comes from big business or the upper class.In effect, they bankroll society. They employ you, they provide goods for you, and they pay the taxes that finance the American lifestyle.If anything, they should demand OUR financial information. To see if THEIR tax money is being spent properly by the Government.Or is that politically incorrect to point out? At the moment, fatcat bashing is the socially accepted norm.

Posted by Haha | Report as abusive

Don’t Ask, Don’t Tell, does not work on Wall Street! I and others demand to know.

Posted by Marie | Report as abusive

Companies that accepted the bailout should a provide full accounting of how they are using public funds – including salaries and bonuses.Companies that do not want to disclose, can repay the government.Companies that cannot survive without bailout money can go under like all the other too-small-to-save companies that mismanage their business.It’s simple, really.

Posted by Karen | Report as abusive

Reply to Roberts post (August 25th, 2009, 3:14 am GMT).Robert, how many people can a welfare program, social security and Medicare support with $25,000,000?

Posted by Pavel | Report as abusive

I think their salaries should published.The bankrupt the nation and get bonues? I guess next election I would voting in a cow from the republican party and not obama

Posted by james peterson | Report as abusive

Yes, it should be disclosed as long as the company being bailed out by my tax money.

Posted by Abu Khalique | Report as abusive

There is nothing gained by the taxpayers by publishing bonus figures. A better solution would be to require the companies to report the bonuses to the government and the govrnment should then require an amount equal to the bonuses to be paid back immediately as the companies obviously did not need that money for their survival.

Posted by wiseoldman | Report as abusive

If I have a private agreement with a bank or individual to invest and manage my account, then his/her salary is their business. But if I have to give them money so they can have a job with no assurances or other recourse to recover my “donation”, then you bet their salary is my business.

Posted by Richard | Report as abusive

If this “top talent” is receiving super-sized corporate paychecks courtesy of the government bail-out, that’s my tax money at work! I have a right to know where and to whom it’s going.

Posted by Bob Walton | Report as abusive

The companies which recieved bail out money ceased to be private corporations after they failed to stay affloat. If it wasn’t for the bail out money, (which comes down to taxpayers money) most of the large corporations and many bank would have colapsed, and in an effort to save the economy, a bail out was thought out to save these companies.Why should the public not be allowed to see what they are paying for?Although wall street workers and top executives have long run their lives unscapped and the public was not demanding to know, once it becomes a public issue and we realise that without the public money, these companies would today have failed.It should be natural that every company who have recieved public money no have an open window policy with the public as it is their money paying ultimately for those top executives and for the company to stay alive.The truth is, we all expect it to be shocking. If the public has just bailed out a multibilion dollar bank whose business model was too weak to stand a recession and we learn that the top executive is making 200 million dollars in benefits, it put back into consideration why we didnt just allow the bank to fail in the first place and allow it to get replaced by thousands of smaller ones which would fill the demand left by the bigger one.In retrospect, the only people against divulgation of head executives and CEO’s are themselves, for the simple reason that they cannot justify the paycheck they earn at the end of the day.When someone can justify the salary they make yearly and the public accepts it, that is when you have a normal economy which can run justly. When you take a look at the public sector, every salary is published and it is possible to see exactly how much your neighbour is making.When it comes to private enterprises, if you wish to keep your information anonymous, you better make sure you can keep your company functional otherwise when you fail (and in this case the government decides it would be too harsh of an impact to have on the economy) you better get ready to show exactly what kind of money you want to make and be able to justify to the entire population that you deserve their tax money for performing your job.


the government does ask for that. It’s not public knowledge because nobody cares. Honestly do you need to know that I make $900 a month?

Posted by Amy | Report as abusive

Rep. Grayson is indicative of our problems with leadership. Rather than keep his mouth shut about a subject on which he is ignorant, he uses guilt by association, a priori assumptions and makes a hateful comment. This is fascist, my friends.


No brainer. We always have absolutely every right to know how our public money is being spent.

Posted by Whys | Report as abusive

Does the public really want to know EXACTLY how its money is being spent: absolutely !!Publically owned banks/companies MUST disclose remuneration.Others can do as they please

Posted by Risk Manager | Report as abusive

The way of a lot of other values in this country, so goes Pay For Performance. Why is it so tough to tie pay to performance in these financial companies?

Posted by Deano | Report as abusive

I’m sure after Kenneth Feinberg has reviewed the salaries (and presumably, bonuses) he will be able to call for an Inquiry which will no doubt look into and report back on the findings at some time in the future, after which the government will need to decide what, if anything, to do about it. They might even need to form a committee and call in experts and consultants on pay and remuneration to quasi-publicly owned corporations to analyze the situation.

Posted by Peter H | Report as abusive

Why?It’s obvious from the other comments here that people already believe the bonuses are too high. There is no possible way that after they’re made public someone will look at them and say “Oh, that CEO only got a $20 million bonus instead of a $25 million bonus? Well, I guess I can’t be outraged by that anymore.”


As long as they have not paid back the bail out money their pay should be controlled and the public should now. Our money is what is keeping then going and we have had no control over how that was spent but they need to be accountable to the U S Citizens.

Posted by J B | Report as abusive

For publicly held companies the shareholders have the right to know what all of the top earners are paid. This compensation should be expressed as a portion of the share holder value to put it in context.If you need to protect privacy group top earners group them.Top 10 employees paid $X, X% of shareholder value.Top 100 employees paid $X, X% of shareholder value.Top 1% of employees paid $X, X% of shareholder value.Top 5% of employees paid $X, X% of shareholder value.

Posted by bumticker | Report as abusive

As far as bonuses. We have wittnessed the devistation that unbridled wages have created. When anyone’s wages are tied to their performance and they are playing with someone elses money bad things will happen. They will take risks that normally they would not take. I surely do not want any bank or broker taking these kind of risks with my money. Maybe some of you who read this had money given to you and you can afford to lose it, but I cannot. It is all public money that is being used for these risks, and it has to be protected. If it is their own money I do not care if they flush it down the toilet, but not with public money.

Posted by f belz | Report as abusive

Why shouldn’t they be published? School Teachers have their salaries published and the entire community gets to chime in when they want a raise – and teachers actually WORK.

Posted by Andi Rapp | Report as abusive

Feinberg in charge as pay czar is just one more example of the good old boys club protecting themselves. What value does a lawyer like Feinberg add to the economy? Nothing. Nothing is produced, nothing of value added to our society. In the end, so to speak, the taxpayer gets screwed once more. This is public money —- taxed from the sweat of our labor every hour of every day, or borrowed on our behalf by reckless politicians, so we also labor to pay the interest on something called the national debt. Is something wrong with this picture??

Posted by wuddajook | Report as abusive

it’s simple… there are conditions to the contract these companies now have with their primary investors (insert american public here). sounds like they’re not used to that. stings a bit i bet.

Posted by AC | Report as abusive

“Privacy laws and fears that highly compensated executives will become targets for an angry public argue for limiting disclosure.”Fear of an angry public??? Damn right they should fear them! Usurping tax dollars to prop up businesses which on a fair field of endeavor would go belly up calls for accountability! Accountability which is long overdue. These “captains of industry” have unashamedly exploited the American workforce and cried poverty for decades. The way these guys throw money at political figures while leaving the working men and women behind is downright ugly behaviour. Millions for campaigns but not a dollar for better wages and healthcare for the rank and file. Yeah,, I’m sympathetic!

Posted by RH Pyle | Report as abusive

Response to Robert..I’m sick and tired of hearing Social Security described as something people take from our system without earning it! As long as it’s coming out of my lifetime’s worth of paychecks I damn well want it when it’s my turn! The government has collected these monies for years and from time to time the government “borrows” from it. There’s the problem,,government misappropriating or allowing corporate weasles to steal and overcharge the people of this country. Visit another country and see how much better things can be done.

Posted by RH Pyle | Report as abusive

There’s nothing wrong with hiding everything these days. We are certainly headed toward a socialist form of government, as every other developed nation has experienced. The American people have just exactly what they want with this government mess, or they’d demand change. I’m glad I’m old and don’t have too many more years left to deal with these issues. It’s every dog for himself for a while longer, then things will change most assuredly.

Posted by Frank | Report as abusive

It´s completely unfair for individual employees compensation to become public on a name by name basis.It´s fair for the public to know what the pay distribution curve looks like at these companies.Not that it matters though. companies have to compensate their employees in line with what the competition pays. Otherwise they will simply jump shimp and go elsewhere.

Posted by Alejandro | Report as abusive

I work in finance. I used to work with some “financial brilliant minds”. Majority of them just pushy people who really gamble with others people money without second thoughts.Capitalism doesn’t mean anarchy or free ride for jerks.Capitalism was over when these ‘proud CEO’ accepted public fund. Today they are paid by public and must act accordingly.1. Corporate law shields top level executives from any responsibilities for wrong/bad decisions. For years investors failed to gain transparency. Handpicked corporate boards tend to protect executives rather than investors. That is the root of unjustifiable salaries.2. We saw these brilliant minds at work:Lehman – CEO failed to act quickly to sell the back.Merrel – CEO was busy with $5,000,000 office renovation on the middle of collapse.Bear – CEO bailed out failed hedge funds without looking into financial statements.AIG – “we will never loose a cent” 2 mo before collapse.These CEO are gone but their lieutenants still run the show. If they cannot stay public light they must go.

Posted by Sergey | Report as abusive

If said CEO’s and employees receive any public funding whatsoever, I don’t care if it’s even a penny, then it would be a crime to NOT report their salaries.They are taking my tax money, therefore I now have a say in what happens to their company or business.

Posted by Bajaraja | Report as abusive

Hey great article way to go!!!!!!!!!!!!!!!


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