Waxman Requests Executive Compensation Information from Nine major Banks - 28-Oct, 2008

Today Chairman
Waxman sent letters to nine major banks that will receive $125 billion
of taxpayer funds requesting information on their compensation and
bonus plans in 2008. Letters were sent to: Bank of America, Bank of New
York Mellon, Citigroup, Goldman Sachs, JP Morgan Chase, Merrill Lynch,
Morgan Stanley, State Street Corporation, and Wells Fargo. The text of
the letter follows:

Earlier this month, the Treasury Department announced plans to
invest $125 billion of taxpayer funds in nine major banks, including
yours, as an emergency measure to rebuild depleted capital. According
to recent public filings, these nine banks have spent or reserved $108
billion for employee compensation and bonuses in the first nine months
of 2008, nearly the same amount as last year.

Some experts have suggested that a significant percentage of this
compensation could come in year-end bonuses and that the size of the
bonuses will be significantly enhanced as a result of the infusion of
taxpayer funds. According to one analyst, “Had it not been for the
government’s help in refinancing their debt they may not have had the
cash to pay bonuses.” Press accounts report that the size of the
bonuses could exceed $6 billion at some firms receiving federal
assistance.

While I understand the need to pay the salaries of employees, I
question the appropriateness of depleting the capital that taxpayers
just injected into the banks through the payment of billions of dollars
in bonuses, especially after one of the financial industry’s worst
years on record. As one newspaper recently reported, “critics of
investment banks have questioned why firms continue to siphon off
billions of dollars of bank earnings into bonus pools rather than using
the funds to shore up the capital position of the crisis-stricken
institutions.”

To assist the Committee’s investigation into this issue, I request
that you provide the following information and documents for your
company as well as any affiliates or subsidiaries:

1. For each year from 2006 to 2008, the total compensation and
average compensation per employee, paid or projected to be paid to all
personnel, broken down by salaries, bonuses (cash and equity), and
benefits; and a description of the reasons for the year-to-year changes
in these amounts.

2. For each year from 2006 to 2008, the number of employees who were
paid, or are projected to be paid, more than $500,000 in total
compensation; the total compensation paid or projected to be paid to
these employees, broken down by salaries, bonuses (cash and equity),
and benefits; and a description of the reasons for the year-to-year
changes in these amounts.

3. For each year from 2006 to 2008, the total compensation paid or
projected to be paid to the ten highest paid employees, broken down by
salaries, bonuses (cash and equity), and benefits; and a description of
the reasons for the year-to-year changes in these amounts.

4. Documents sufficient to show all policies governing the granting
of the bonuses to the groups of employees referenced in items (1) to
(3).

Please produce the requested information to the Committee no later
than November 10, 2008. To the extent that 2008 year-end bonuses have
not been finalized by that time, you should notify the Committee as
soon as those bonuses are determined and supplement your response with
updated information and responsive documents.

The Committee on Oversight and Government Reform is the principal
oversight committee in the House of Representatives and has broad
oversight jurisdiction as set forth in House Rule X. An attachment to
this letter provides additional information about how to respond to the
Committee’s request.

If you have any questions about this request, please ask your
representatives to contact Theodore Chuang or Alison Cassady of the
Committee staff at (202) 225-5420. Thank you for your cooperation.

Sincerely,

Henry A. Waxman

Chairman