Monday, June 01, 2009
Jack W. Gibson retrieves his golden parachute
Banks rescued by the highly controversial $700 billion bailout plan continue to find loopholes for their retiring executives, like paying them to not do anything…literally. Associated Banc-Corp’s president and chief operating officer, Lisa Binder, resigned with a severance package totaling $1.65 million. According to her severance agreement, the compensation is for Binder’s agreement to not work for any company competing with Wisconsin-based Associated Banc-Corp for at least one year.
In February 2009, Congress passed legislation that banned golden parachute payments to executives leaving a bank that had received Troubled Asset Relief Program (TARP) money from the U.S. government. Yet the banks have had little trouble getting around the restrictions.
Another loophole exploiter is Jack W. Gibson, the departing CEO of Virginia-based Hampton Roads Bankshares, who will be paid $1.3 million for consulting duties, and will receive other perks, including complimentary membership at a local country club, title to the company car, ambiguous coverage of “any necessary incidentals” over the next three years, and 18 months of health insurance. If the U.S. Department of the Treasury or the Federal Reserve determines his severance package is illegal, when and if the restrictions are lifted, Gibson is still entitled to all the benefits of the arrangement with an 8 percent interest rate.
-Erika K. Solanki
Bailed-Out Bank CEO Gets Paid $1.3 Million to Retire (by Paul Kiel, ProPublica)
Bailed-Out Bank Tries Golden Parachute Loophole (by Paul Kiel, ProPublica)
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