Press Releases

Washington, DC--- Congressman Paul Hodes today released the following statement after reports that the Obama Administration is planning to announce that they will curtail executive pay at banks that received assistance in the Wall Street bailout.

"It is wrong to award bonuses to failed executives that drove our economy into the ditch. Rather than subsidizing private jets and lavish trips, we should focus on creating good-paying jobs for working families. These rules are a step in the right direction, but the Treasury department should go further and curtail executive compensation through stock options as well. If we are going to curb executive bonuses, we should not create loopholes executives can use down the road. We must ensure that the individuals who are responsible for this economic mess are not rewarded with millions of taxpayer dollars," Congressman Paul Hodes said.

Under the plan that is to be announced by Treasury officials, cash salaries for the top 25 executives at seven firms that received taxpayer funds as part of the Wall Street bailout will be cut by 90%. American International Group, Citigroup, Bank of America, General Motors, Chrysler, GMAC, and Chrysler Financial together received nearly a quarter of a trillion dollars in taxpayer funds, as well as other guarantees and support.

However, executives at these companies will still be able to make millions of dollars in the next several years through stock options. Executives would only have to wait two years before redeeming any shares of company stock that were awarded as part of the executive’s salary. They could cash in one third of the stock after two years, another third after three years, and the entirety of the stock after four years. This loophole means that executives who made poor decisions and brought the financial sector to the brink of collapse could be rewarded with millions in profit from the sale of their stock. This is an unacceptable use of taxpayer funds, and Congressman Hodes is committed to ending this practice.

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