http://www.fdic.gov/news/news/financial/2009/fil09001.html

State nonmember institutions should implement a process to monitor their use of capital injections, liquidity support and/or financing guarantees obtained through recent financial stability programs established by Department of the Treasury, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve. In particular, the monitoring processes should help to determine how participation in these federal programs has assisted institutions in supporting prudent lending and/or supporting efforts to work with existing borrowers to avoid unnecessary foreclosures. The FDIC encourages institutions to include a summary of this information in shareholder and public reports, annual reports and financial statements, as applicable.

I like how you used professional atheletes as an example. Just look at Major League Baseball. There are several players being payed huge amounts of money, yet all they do is underperform (e.g. Barry Zito). There simply is no justification for the ROI. I think executives much like players in MLB have too much leverage in terms of their compensation. The people doing the hiring should have some way to hedge against lack of performance.

Looks like congress is well aware of this issue:
http://news.yahoo.com/s/nm/20090112/bs_nm/us_usa_banking_tarp
http://news.yahoo.com/s/nm/20090112/bs_nm/us_usa_banking_tarp

My worry about people wanting more transparency is that Congress and others will try to meddle even more in the affairs of the companies with TARP money. As the hearings showed, Congress has very little clue to how the banking world works so the last thing we need is them poking and prodding around in every bank trying to set limits to this and that. Moreover, the restrictions they want on some of these companies are getting absurd. Limiting CEO compensation, no bonuses for Top 25 execs, more transparency for what they are doing with the money??? If it’s a public company then the voting shareholders (preferred don’t get votes) should put a board they want in place, which will put a compensation committee in place, which will then limit executive compensation.

I’m all for protecting the taxpayer but let’s be honest, the taxpayers are going to make a handsome killing off of this deal. Maybe the taxpayers should be more concerned with what will happen to those profits once they get in the hands of Congress (raises for Congress, anyone?) instead of what banks are doing with it in order to survive.

In the greater scheme of things, the $925K is a fraction of the $80 million that Hampton rec’d. But my question is why are these two execs getting bonuses at all just for signing their names?

I guess you could be a Weiner like BD and blame Bush for everything, but even the mighty Obama is not going to be able to get banks to lend until credit worthy borrowers are demanding money. Common sense folks….common sense.

Posted by a greedy banker…

There is a chicken and egg argument here: do businesses and consumers become more creditworthy after they get the loan or should they be more creditworthy before they get the loan?

There is no “corruption” with the TARP program. Is it perfect? No, but it sures beats the alternative of doing nothing and since the program was initiated it has prevented a slew of bank failures. Blaming the Bush Administration for everything is a cheap cop out for people who don’t understand what is really going on.

IMO, the biggest flaw of this program is letting anyone become bank holding companies. What we don’t need right now is more banks, especially new banks formed by companies who are just trying to access the TARP money. Now they have to convert to a bank and that brings on a whole set of challenges they have never had to face before.

Also, let me repeat that these banks have to pay 5% annually on the money borrowed and must have principal returned within 5 years or that rate goes up to 9% (I think). If every bank returns the money in 5 years (big assumption) then the government stands to make over $50 Billion.

Are we really really really sure that Obama can’t start early?

Thats odd that I don’t see any social bookmark buttons (I tried firefox, IE, and Chrome).

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@ T:

The fact that government gets paid interest puts me more at ease. I still don’t think these executives should be getting the money and benefits that they are getting.

These gateway execs aren’t exactly leading their company to new heights. More importantly, paying them handsomely for doing nothing is exploiting the TARP. Like Michelle was saying, “how much of the TARP money is going toward signing bonuses[?]” I don’t see how padding Ben Berry’s wallet and David Twiddy’s wallets will increase liquidity in the markets.

As mentioned in the article:
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Hampton Roads Chairman and CEO Jack Gibson said, “The investment by the U. S. Treasury will ensure that we can fully meet the competitive challenges presented by the current economy and maintain leadership in all of our banking markets for the benefit of our shareholders, customers and employees.”
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I just don’t see how lifetime health insurance and country club memberships + 500K all factor into the TARP.

I don’t see this as that big of a deal, especially when it’s in conjunction with an acquistion thatincreases the acquirer’s deposits, which in turn will allow the acquirer to make more loans. After all, isn’t everyone screaming that the banks aren’t making enough loans right now?