Posts for Tag: recession

Finally... the government gets it!

When asked whether he left open the option to pressure a bank CEO to resign, Geithner responded, "Of course. Of course.

On the heels of Rick Wagoner's ouster, Tim Geithner made this statement in an interview with CBS.  Though not as adamant as I would prefer, it still sends a message to executives of companies who are receiving government assistance.  If they couldn't run a good business while playing with their own money, what makes us think they are going to do any better when the money isn't their own?

I assume this is a misprint...

Sprint's CEO awarded $2.6 billion bonus

I assume that's a typo and it's $2.6 MILLION and not BILLION.  Even still, I don't really have an issue with any CEO's pay as long as the company doesn't get government assistance.  If Sprint can absorb whatever losses they've had AND pay him a bonus, that's their prerogative.  My rule of thumb is that any company that receives a bailout needs to have their executive ranks whacked because if those executive were doing a good job, they would never have needed a bailout to begin with.

UPDATE: CNET has fixed the typo.

Obama dishes tough love ... GM's CEO asked to resigns

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

You never want to relish when someone gets fired.  But don't cry for Rick Wagoner.  He made over $63 million during his career at GM, most of which came during his years as CEO (a little under $39 million).  When you realize that GM lost approximately $82 billion in the last four years of his tenure, it was obvious that new leadership was needed.  Interim chairman, Kent Kresa, also stated that most of the GM board of directors would be changed at the annual meeting in August.  Another good move seeing as how they kept on supporting Wagoner year after year while he presided over the meltdown of an American icon.  I don't know if the US auto industry can be saved, but it couldn't hurt to have some new blood running things.  I want to desparately support American made automobiles and if the stars are aligned, my next car will be American made.

A quick solution to the Bonus Scandal at AIG

The news regarding $165 million in bonuses paid to AIG executives has been making the rounds. A lot of people are trying to come up with solutions on how to get back some or all of that money. There's a lot of legal back and forth about whether it's even possible or that doing so would hurt AIG by having "good" executives leave (are there not a lot of "good" executives currently out of work that couldn't fill their spots?). Since I'm a solutions oriented guy, I have a suggestion that might solve everyone's issues. Just reduce the next bailout payment by $165 million. Believe me, $165 million may sound like a lot but compare that to the billions we've given AIG so far, it's really not that big of a deal. More than anything, it's a public relations issue and not an operations issue. So to soothe the public's concern, just deduct the bonus amount from the next payment and call it a wash. It'll be a lot easier than lawsuits and grand standing but maybe to all the politicians the publicity was all they cared about.

UPDATE: More craziness has insued.  From a special surtax to executives allegedly being asked to commit ritual suicide.  Again, in my opinion, it's an opportunity for certain politicians to cash in publicity-wise on the outrage by the taxpayers.  However, towards the end of the article, there is mention that the Treasury would try to restructure the next bailout payment to recoup the bonus amount.  That's probably the most frictionless way to do it.