NEW YORK – Andrew Cuomo, the New York attorney-general, has asked the nine banks receiving financial aid from the US Treasury’s rescue deal to provide his office with information on their executive bonuses and remuneration packages. The move follows identical Congress demands from chairman of the House Committee on Oversight and Government Reform Henry Waxman.
Cuomo’s office has now requested “detailed accounting” of expected payments for the coming bonus season from Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, State Street and Wells Fargo. The banks under scrutiny are those onboard the US Treasury’s Troubled Asset Relief Program (Tarp).
Cuomo said in one letter: “In particular, it is vital that you immediately provide us with any and all information concerning your firm's expected bonus pool for this year, both prior to and after you understood that the firm would be a recipient of taxpayer funds pursuant to the Troubled Asset Relief Program. Obviously, we will have grave concern if your expected bonus pool has increased in any way as a result of your receipt or expected receipt of taxpayer funds.”
Cuomo’s office already asked to receive remuneration details from US insurer AIG – which has also been on the receiving end of $122.8 billion of federal credit. AIG subsequently agreed to freeze $19 million in payments to former chief executive Martin Sullivan.
US political calls for remuneration scrutiny are paralleled by those taking place in Europe. The UK Financial Services Authority (FSA) has already issued a “Dear CEO” letter asking for detailed information in time for next year, while the recently approved German national banking bailout – similar in structure to US and UK moves – explicitly requires remuneration reform for those German banks seeking government financing.