Bank CEO’s Meet With Obama at White House - What Was Said
Lloyd Blankfein of Goldman Sachs, Kenneth Chenault of American Express, Kenneth Lewis of Bank of America and Edward Yingling of the American Bankers Association walk down the driveway at the White House.
The nation’s most prominent Bank CEO’s were in Washington again today, this time for a lunchtime meeting with President Obama to discuss important issues such as limits on executive compensation.
The CEO’s attending were the following:
Jamie Dimon, JP Morgan Chase
Ken Chenault, American Express
John Koskinen, Freddie Mac
Ronald Logue, State Street
Robert Kelly, BONY-Mellon
Rick Waddell, Northern Trust
James Rohr, PNC
Lloyd Blankfein, Goldman Sachs
John Mack, Morgan Stanley
Vikram Pandit, Citigroup
John Stumpf, Wells Fargo
Cam Fine, Independent Community Bankers
Edward Yingling, ABA
Richard Davis, US Bank
Ken Lewis, Bank of America
The consensus from the CEO’s after emerging from the meeting is that it was very informative and they will do as a group what they feel is best for the country and what will help to get our economy back on track. No CEO made any earth shattering comments following the meeting, but they did give some insight into some important issues.
On Executive Compensation:
- There was consensus that compensation policies went too far and need to be reformed. The interests of individual employees must become more closely aligned with the interests of the Firm as a whole. Several firms have already begun to reform these policies by increasing the percentage of stock in bonus packages and longer vesting schedules. There was no direct comment on the 90% tax on bonuses passed by the House.
On Returning TARP Funds:
- No firm will return TARP funds until the government bank stress tests are completed in April. Some banks expressed the desire to return TARP funds but did not set any timetable for doing so and will be coordinating with the Treasury department. These banks also feel that the return of TARP funds is in the “best interest of the taxpayer” as those funds could be deployed elsewhere in the economy.
On the Public-Private Partnership:
- Looks like not much was said on this in the meeting. It doesn’t appear that Goldman and Morgan Stanley will be selling assets into the program as it only applies to assets held on the bank level. Remember, Goldman and MS are recently converted investment banks. It seems that they have the majority of their assets at the holding company level which don’t seem to qualify by the way John Mack was speaking.
On Profitability:
- Both the CEO’s of JP Morgan and Bank of America indicated that March was a tough month for their trading books.
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