Taxpayers Subsidize Billions in Wall Street Bonuses: Report

By teleSUR

02 September 16

According to the study, 20 U.S. banks paid more than US$2 billion in bonuses to their top five executives over the past four years.

.S. taxpayers have been subsidizing more than US$2 billion in executive bonuses at the nation's largest banks since 2012, according to a new report published Thursday by the Institute for Policy Studies.

“Taxpayers should not have to subsidize excessive CEO bonuses at any corporation,” said report author Sarah Anderson. “But such subsidies are particularly troubling when they prop up a pay system that encourages the reckless behavior which caused one devastating national crisis, and could cause more in the future.”

According to the study, 20 U.S. banks paid more than US$2 billion in bonuses to their top five executives over the past four years. This translates into a taxpayer subsidy worth more than US$725 million, or US$1.7 million per executive per year.

“The study focuses on a 1993 reform under former President Bill Clinton that was intended to rein in runaway CEO pay by capping the tax deductibility of compensation at US$1 million,” says the report. “Instead, the new rule fueled the explosion of CEO pay by including a huge loophole for stock options and other ‘performance’ pay.”

Democratic presidential nominee Hillary Clinton said she wants to reform this loophole, but hasn't said she will close it.

Among other findings, between 2010 and 2015, the top executives at the 20 largest banks earned more than US$800 million in bonuses. Also, executives reaped large bonuses that their banks could write off as tax deductions.