NEW YORK - WALL Street banks rescued in the 2008 financial crisis paid bonuses regardless of their performance, according to a report published on Thursday by New York Attorney General Andrew Cuomo.
The report says that some banks bailed out by the US government paid executives bonuses that totalled more than entire company profits last year.
'Even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks' financial performance,' the report by Cuomo's office says.
Bonuses for Goldman Sachs, Morgan Stanley and JP Morgan Chase exceeded the banks' income, the report said. 'There is no clear rhyme or reason to the way banks compensate,' it said.
'The relationship between performance of the firms and bonuses varied immensely and the bonus system does not appear to have been tethered to any consistent principles.' The report, prepared over nine months in the aftermath of the 2008 financial meltdown, looks into banks' performance and practices.
The report says that in 2008 Goldman paid US$4.8 billion (S$6.93 billion) in bonuses, more than double its income of US$2.3 billion, while Morgan Stanley paid US$4.475 billion in bonuses and earned only US$1.7 billion.
Both banks received US$10 billion in emergency government funds.
JP Morgan, which received US$25 billion in bailout funds, earned US$5.6 billion and paid US$8.6 billion in bonuses.
Citigroup and Merrill Lynch each lost more than US$27 billion. They paid out US$5.33 billion and US$3.6 billion respectively in bonuses, according to the report.
'Other banks, like State Street and Bank of New York Mellon, paid bonuses that were more in line with their net income, which is certainly what one would expect in a difficult year like 2008,' the report said.
For example, State Street earned US$1.8 billion, paid bonuses of US$470 million, and received US$2 billion in US emergency funding.
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