Gothamist
A non-profit newsroom, powered by WNYC.
Gothamist
Listen Live
News
Execs At Bailed Out Banks Convinced Government They Couldn't Survive On $500K
By
John Del Signore
Published Jan 24, 2012
Modified Jan 25, 2012
Share
FacebookTwitterRedditEmail
Never miss a story
Email address
By submitting your information, you're agreeing to receive communications from New York Public Radio in accordance with our Terms .
By
John Del Signore
Published Jan 24, 2012
Modified Jan 25, 2012
Share
FacebookTwitterRedditEmail
We rely on your support to make local news available to all
Make your contribution now and help Gothamist thrive in 2026. Donate today
Gothamist is funded by sponsors and member donations
A new report came out today from the Special Inspector General charged with auditing the government's TARP program for foundering financial institutions. According to the report, which you can read in full below, the "Special Master" appointed to curb executive pay at companies getting TARP money wasn't all that special after all. Although President Obama and Congress wanted pay caps of $500K for executives at seven companies that got bailed out, 49 fat cats still got paid $5 million or more between 2009 and 2011. Here's why, according to the audit:
Although generally he limited cash compensation and made some reductions in pay, the Special Master still approved total compensation packages in the millions. Special Master [Kenneth] Feinberg said that the companies pressured him to let the companies pay executives enough to keep them from quitting, and that Treasury officials pressured him to let the companies pay executives enough to keep the companies competitive and on track to repay TARP funds.
Given OSM's overriding goal, the seven companies had significant leverage over OSM by proposing and negotiating for excessive pay packages based on historical pay, warning Special Master Feinberg that if he did not provide competitive pay packages, top officials would leave and go elsewhere.
In proposing high pay packages based on historical pay prior to their bailout, the TARP companies failed to take into account the exceptional situation they had gotten themselves into that necessitated taxpayer bailout. Rather than view their compensation through the lens of partial Government ownership, the companies argued that their proposed pay packages were necessary to retain or attract employees who were crucial to the company.
On page 48 of the audit, the CEO of Ally Financial (formerly the General Motors Acceptance Corporation) explains why his company pressured the Special Master to go above the $500K pay cap. "We had an individual who was making $1.5 million total compensation with $1 million in cash," the executive, Michael Carpenter, said. "Cutting this person’s salary to $500,000 cash resulted in the person being cash poor. This individual is in their early 40s, with two kids in private school, who is now considered cash poor... We were concerned that these people would not meet their monthly expenses due to the reduction in cash."
WON'T SOMEONE THINK OF THE CHILDREN (in private school)?! Ally Financial, for what it's worth, still owes taxpayers billions of dollars. But thank goodness none of their executives were driven to the bread lines because they were forced to live on half a million a year—if you call that living.
Tagged
audits
bail out
banksters
fat cats
tarp
wall street
John Del Signore
Originally from the Albany area, John Del Signore has called NYC home since 1995. In addition to his thousands of meticulously-crafted bespoke blog posts for Gothamist, his writing has also been published in The Awl, Deadspin, The Nervous Breakdown, and performed at The Brick Theater in Brooklyn.
Read more
Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
MORE news
2 pedestrians killed in Bronx crash after driver ran red light, police say
The NYPD said the investigation is continuing and no one had been arrested Saturday.
By
Brittany Kriegstein
and
Ann Givens
Published Oct 10, 2026 at 1:24 p.m. ET
Rain could put a damper on NYC’s long weekend. Here’s when it will clear.
Remnants of Hurricane Isaias could bring more than an inch of rain, gusty winds and even a thunderstorm Sunday before conditions improve Monday.
By
Brittany Kriegstein
News
Rain could put a damper on NYC’s long weekend. Here’s when it will clear.
Remnants of Hurricane Isaias could bring more than an inch of rain, gusty winds and even a thunderstorm Sunday before conditions improve Monday.
By
Brittany Kriegstein
Holy civics! NYC schools' own comic books in the spotlight at Comic Con
By
Jessica Gould
What we know about the ICE shooting in NYC
By
Karen Yi
DSA to Mamdani: Fire NYPD commissioner if ICE doesn't leave NYC
By
Elizabeth Kim
,
Brigid Bergin
and
Ben Feuerherd
Never miss a story
Catch up on the most important headlines with a roundup of essential NYC stories, delivered to your inbox daily.
Sign upEmail address
By submitting your information, you're agreeing to receive communications from New York Public Radio in accordance with our Terms .