US President criticises “shameful“ bonus payouts

30 January 2009

Even as financial institutions collapsed around the world dragging investors and employees down to penury, several senior executives have managed to secure their own futures with generous bonuses. Even though several of them have declined such obscene payouts in recent times, the anger exists. Now, condemnation has come from the highest quarters of public life.

US President Barack Obama yesterday rebuked Wall Street bankers who received millions of dollars in bonuses last year, calling the payouts "shameful" and chiding the executives for a lack of personal responsibility at a precarious time for the nation's economy.

"There will be time for them to make profits, and there will be time for them to get bonuses," the clearly irritated president said. "Now's not that time. And that's a message that I intend to send directly to them."

It was a pointed, if calculated, flash of anger from the president, who frequently railed against excesses in executive compensation on the campaign trail. He struck his populist tone as he confronted the possibility of having to ask Congress for additional large sums of money, beyond the $700 billion already authorised, to prop up the financial system, even as he pushes Congress to move quickly on a separate economic stimulus package that could cost taxpayers as much as $900 billion.

The president was reacting to a report by the New York State comptroller that found financial executives had received an estimated $18.4 billion in bonuses for 2008, less than for the previous several years but the same level of bonuses as they received in 2004, when times were flush.

Obama's comments came on the same day that the Democratic chairman of the Senate Banking Committee threatened to bring before his committee any Wall Street executives who take big bonuses after their firms are propped up with public money.