| Today's Feature Flanigan
Freshman Legislator of the Year.
Jefferson City – State
Representative Tom Flanigan (R-Carthage) was
recently recognized, by his colleagues, for his
work on the 2010 state budget. Flanigan received
the Freshman Legislator of the Year Award from
House Speaker Ron Richard (R-Joplin) for his work
on Budget and Fiscal Policy issues, at a brief
ceremony in the Speaker’s Office.
The House Budget Committee, on
which Rep. Flanigan serves, is charged with
formulating the annual state budget, and ensuring
the state’s present and future financial
commitments are thoroughly examined and planned
for. The state budget for Fiscal Year 2010 is
$23.1 billion dollars. Rep. Flanigan also
co-sponsored legislation that would revise the
Missouri tax code as well as legislation designed
to stop the use of public funds for lobbying
efforts.
"Fiscal responsibility is
the cornerstone of good government," said
Rep. Flanigan. "In order to improve the
lives of all Missourians and to weather the
current economic storm, it is critically
important that we care for our state’s
finances responsibly and conservatively."
Bailed-Out
Bank CEO Gets Paid $1.3 Million to Retire
by Paul Kiel, www.ProPublica.org
It has been reported that a
Wisconsin bank had managed to pay its departing
president and chief operating officer $1.65
million despite Congress’ ban against golden
parachutes for companies that accepted TARP
money.
Well, here’s another bank
that has found a way around the ban. Hampton
Roads Bankshares of Virginia, which received
$80.3 million of TARP money last year, announced
last week that its CEO was retiring. On Friday,
the bank disclosed [4] that in addition to a full
slate of retirement benefits, the exec will be
paid $1.3 million for "consulting
duties."
Jack Gibson, the departing CEO,
evidently doesn’t think he’ll be
working too hard consulting. "I can think of
no better time to fulfill my personal goal of
early retirement," he said in a press
release announcing his exit. "It is well
known within the company that I would like to
retire by age 60, and I’m almost
there." During the period of his three-year
consulting gig, the bank has also agreed to cover
his membership dues at a local country club.
The $1.3 million that Gibson
will receive roughly matches the total amount he
received in salary over the last three years as
CEO ($1.4 million).
"That is a very
substantial amount of money for consultancy for a
bank of this size," said Paul Hodgson of the
Corporate Library, a corporate-governance
research firm. "I’ve seen S&P 500
telecoms pay less than this for consultancy work.
This is supposed to be a retirement."
In addition to the cash
payments and club membership, Gibson will get
some other perks: title to the company car that
he uses, "any necessary incidentals"
over the next three years, and health insurance
for 18 months. The agreement also gives Gibson
the option to require the bank to buy 100,000 of
his shares in the company. (The stock closed
yesterday at $8.19 a share.)
Like Wisconsin’s
Associated Banc-Corp, Hampton Roads is prepared
for the possibility that regulators will
determine that the arrangement violates the ban
on golden parachutes. According to the separation
agreement, if the Treasury Department or the
Federal Reserve determines that any payment
breaks the law—or if they even
"criticize" the arrangement—the
bank can choose not to pay any more and ask
Gibson to return what he has received. But that
would only be a short-term reversal. The
agreement says that if the restrictions were
lifted (either through change of legislation or
the bank’s repaying its TARP money), Hampton
Roads would pay everything that had been
withheld—with 8 percent interest.
Hampton Roads did not respond
to our requests for comment, and we couldn’t
track down Gibson.
Obama Admin
Tests Waters for Regulatory Overhaul
by Paul Kiel, www.ProPublica.org
Both The Wall Street Journal
and the Washington Post have a rundown on aspects
of the administration’s likely overhaul of
the financial regulatory system. The descriptions
come from anonymous sources, and it seems to be a
testing of the waters.
There would be some big
changes. No longer would there be a quartet of
regulatory agencies, an arrangement that has
allowed banks to sometimes game the system by
choosing the one with the lightest regulatory
touch. There would be only one to directly
oversee banks—a completely new agency. Two
of the four existing agencies would disappear.
The FDIC and Federal Reserve would cease to
regulate banks as they do now, but they would
gain other powers. The FDIC would be able to put
any institution, no matter how big, into
receivership. The Fed would be charged with
watching and controlling risk across the system.
There would also be a new agency with the primary
mission of protecting consumers.
The changes are likely to draw
opposition from a number of corners (e.g.,
lawmakers whose committees oversee certain
aspects of the current system, the banks, etc.),
the Post points out, so any system overhaul
won’t be happening overnight.
There are definite flaws in the
existing system. For instance, ProPublica has
reported on how AIG’s regulator wasn’t
up to the job and how IndyMac’s failure
exposed weak oversight by regulators.
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