Executive Compensation Plans For Bailed Out Banks Due Today...

Bank's Continued Reckless Policies, Reliance on Taxpayer Funds, Unwillingness to Aid in Economic Recovery Top List

Washington, DC--Today, faltering banks like Bank of America--which have not paid back their billions in taxpayer-funded bailouts--are required to submit 2009 compensation plans for their top 25 earners to the Obama Administration's pay Czar, Kenneth Feinberg. In response to this and reports that big banks are reinstating guaranteed pay and bonus structures not tied to employee performance for top executives, the Service Employees International Union (SEIU) has released its Top Ten Reasons Why Bank of America CEO Ken Lewis and Top Executives Don't Deserve Bonuses this Year."

Despite Bank of America's continued reliance on taxpayer bailout funds and their unwillingness to help struggling homeowners and small businesses survive the economic crisis, the bank is setting aside millions for top executive bonuses and recruitment of high level employees. According to the New York Times, Bank of America offered one potential executive a multimillion dollar contract worth $15 million a year for two years and another a two-year guaranteed package worth about $6 million annually in cash and stock.

"Bank of America continues to be the poster child for a reckless financial industry that will stop at nothing to enrich themselves at the expense of our economy," said Stephen Lerner, Director of SEIU's Financial Reform Campaign. "Bank executives shouldn't receive a dime of bonus money until they commit to reforming the failed policies that created our current economic crisis and invest in the real recovery of Main Street."

1) Bank of America has received nearly $200 billion in taxpayer bailouts and backstops. As long as Bank of America is reliant on billions of taxpayer bailout funds, they should not be allowed to pay out bonuses to top executives while millions of Americans continue to lose their homes, jobs, and retirement savings.

2) Shareholders Ousted Ken Lewis as Chair of the Board. In a show of no confidence, shareholders ousted Ken Lewis as Chair of the Board at the bank's last shareholder meeting. It was a rejection of Lewis' policies that contributed to our economic collapse and followed demands by more than 100,000 taxpayers across the country for shareholders to fire Lewis.

3) Despite receiving bailout funds to increase lending, the bank continues to decrease small business lending. As the failure rate of small businesses continues to rise, Bank of America has--and continues--to reduce the amount it lends in Small Business Association loans while increasing higher-interest and higher-default credit card lending and a risky Express Loan program. Bank of America cut SBA 7(a) loans by 90 percent--twice the national average. The greatest decline occurred after the bank received bailout funds last October--money intended to jumpstart lending. Read report.

4) Ken Lewis kept details of Merrill Lynch's poor health and plans of multi-billion dollar bonuses from shareholders. The SEC recently fined Bank of America $33 million for misleading shareholders about commitments to pay Merrill Lynch executives up to $5.8 billion in bonuses during BofA's purchase of Merrill last year. With this money, BofA could have given each of its bank tellers an estimated $151,000 raise, nearly seven times their median salary.

5) Bank of America refuses to help struggling homeowners save their homes. Bank of America was classified as one of the worst performers among the biggest U.S. banks in modifying loans for struggling homeowners, according to a Treasury Department report. BofA began 27,985 trial loan modifications, or 4 percent of its eligible loans, under the government's Making Home Affordable Program started this year.

6) The Bank plans to close 10 percent of branches, jeopardizing thousands of jobs. Reports indicate that Bank of America is considering shutting down 10 percent of its branches--the equivalent of 600 offices and 5,000 jobs. Executives should not receive bonuses while they slash jobs and leave communities without banking centers.

7) Bank of America employees assert they are not being paid for all the hours they work. Bank tellers and personal bankers continue to file lawsuits asserting that the bank refuses to pay them for all of the hours they work each week. In fact, Bank of America has had to pay more than $41 million since 2001 to settle lawsuits alleging overtime violations.

8) Predatory bank fees should not finance bonuses. Last year, Bank of America collected $10.3 billion in bank fees, almost 30 percent higher than either of its two largest competitors. In fact, the bank recently agreed to pay $35 million to settle a class-action lawsuit that claimed the bank manipulated customers' bank accounts to increase overdraft fees.

9) Despite taking taxpayer money, the bank continues to spend millions lobbying against pro-working family legislation. Just three days after receiving $25 billion in federal bailout funds, Bank of America was caught holding a conference call with clients to organize opposition to the Employee Free Choice Act and fundraise for those efforts. Together, Bank of America and Merrill Lynch spent more than $12 million on lobbying in 2008. The bank opposes President Obama's financial reform efforts and lobbied against bills like the Credit Cardholders Bill of Rights and the Foreclosure Prevention Act of 2008.

10) Bank of America has pushed the cost of their employees' healthcare on to taxpayers. Bank of America has made taxpayers pick up the tab for approximately $50 million a year in employee health care costs because many Bank of America workers cannot afford the company's health insurance and must rely on state-subsidized healthcare programs.

With 2.1 million members in Canada, the United States and Puerto Rico, SEIU is the fastest-growing union in the Americas. Focused on uniting workers in healthcare, public services and property services, SEIU members are winning better wages, healthcare and more secure jobs for our communities, while uniting their strength with their counterparts around the world to help ensure that workers--not just corporations and CEOs--benefit from today's global economy.

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