Few could argue with Barack Obama last week when the US president said Wall Street owed a debt of gratitude to taxpayers. Some of America's largest banks would not have survived without the trillions of dollars the government used to shore up the financial sector. Less remarked upon, however, is the personal windfall executives of the bailed-out institutions received as a result of Washington's largesse.
This is no doubt a controversial conclusion, since most of the chief executives whose banks were forced to take funds from the troubled asset relief programme, or Tarp, nearly a year ago will point immediately – and correctly – to the fact that many of them eschewed a bonus for 2008.
For instance, Lloyd Blankfein of Goldman Sachs was paid about $70m in 2007 but only his $600,000 salary for 2008 (plus $111,000 for the cost of a car and driver). John Mack, who has just announced his resignation as chief executive of Morgan Stanley effective from January 2010, received an annual salary of $800,000 (plus $438,000 of imputed income from perks such as use of the corporate jet, which Morgan Stanley requires for “security” purposes) in 2008. He never received a cash bonus during his four and a half years at the helm at Morgan Stanley, although he did receive 500,000 shares of restricted stock, then worth $26m, when he rejoined the bank from Credit Suisse in June 2005. Jamie Dimon, chief executive of JPMorgan Chase, had to make do with his $1m salary in 2008 (plus car and driver and aircraft income) but received no cash bonus. Ken Lewis, the chief executive of the beleaguered Bank of America, somehow came out the winner on a relative cash basis in 2008, with a salary of $1.5m and, like the others, perk allowances and no cash bonus.