Tag Archives: bonuses

Green Energy Company CEOs Gets Raises, Where Is Obama Outrage?

When President Barack Hussein Obama ran for president in 2008, he promised to create a minimum of five million new green related jobs. When elected, Obama pursued his green energy dream by having the Department of Energy (DOE) subsidize and/or provide loans and loan guarantees to green energy companies. Those subsidies and loans have totaled billions of taxpayer dollars. Yet the green energy companies, despite DOE assistance, continue to go bankrupt and/or cut back.

Facing financial challenges, we would expect the green energy companies to be reducing in every way possible, but that is not necessarily the case. It seems that some of the green energy companies are paying top executives higher salaries plus giving them bonuses.

ECOtality is one of those struggling green companies that took $141 million from the DOE. Even though they reported a 2011 loss of $22.5 million, they gave the CEO a 50% raise in pay.

First Solar has received around $1.5 billion in DOE stimulus backed loans. First Solar just announced a fourth-quarter loss of $413.1 million, that it closed plants in Germany and Malaysia, and is laying off 2,000 employees. Yet First Solar’s CEO, Mike Ahearn, earned $32 million in salary and bonuses.

A123 Systems, a battery manufacturer that supplied (among others) Fisker Automotive, announced that it will replace all the defective batteries it shipped at a cost of $55 million. A123 Systems got a $249 million grant from DOE. The top four A123 executives all received an average of a 20% increase in their base salary and several of them have seen additional increases in 2012.

Obama’s silence on the salary increases and bonuses of these green energy companies speaks loudly. He feigned outrage when he learned of AIG’s top executive bonuses, saying, “How do they justify this outrage to the taxpayers who are keeping the company afloat?” But when it comes to the green energy industry, we never hear any criticism from Obama. Can anyone say “double standard?”

Is it fair to say that these are examples of our tax dollars at work?

But that’s just my opinion.

Cross-posted at RWNO, my personal web site.

Solyndra: At It Again, Wants To Pay Bonuses

In what has to be the most outrageous display of chutzpah, a proposal filed by Solyndra’s attorneys in U.S. Bankruptcy Court in Delaware proposes to pay bonuses of from $10,000 to $50,000 to persuade key employees to stay with Solyndra. Bankruptcy attorneys said the “key employee incentive plan” tries to keep important personnel from leaving the company. Proposed bonus recipients include nine equipment engineers, six general business and finance employees, and two information technology specialists. The largest bonus, $50,000, would go to a Solyndra employee whose job title is listed as a senior director with a base salary of $206,499 per year. Two senior managers will receive bonuses of $30,000 and $32,500.

Solyndra employed about 1,100 people before it went bankrupt in 2011. Today just 84 employees remain. Bankruptcy attorneys argued that the bonus money, ranging from 8 percent to 30 percent of employees’ base annual salaries, “will motivate the eligible employees to work as hard as possible” to achieve a Chapter 11 restructuring plan and sale.

More than 50 House Republicans are pressing President Barack Hussein Obama to oppose failed Solyndra’s proposal to give bonuses to its remaining employees. The lawmakers, in a letter, called on Obama to direct the Justice Department to oppose Solyndra’s bonus proposal in ongoing bankruptcy proceedings. The letter said (among other things): “No matter how we arrived at this moment and setting aside political disagreements concerning Solyndra, the simple fact is that American taxpayers should not be footing the bill for bonuses for employees of Solyndra.”

Bankruptcy documents show that more than a dozen senior executives at Solyndra were awarded quarterly bonuses of from $55,000 to $60,000 on April 15, 2011, and again on July 8, 2011.

Let’s see. First, pay big bonuses, then file for bankruptcy, then reward failure with more bonuses, all at taxpayer expense. That is, indeed, colossal chutzpah!

But that’s just my opinion.

Fannie, Freddie CEOs Ask For More Taxpayer Money, Defend Bonuses

The Federal Housing Finance Agency (FHFA), whose current acting director is Edward DeMarco, is the regulator and conservator of the Federal National Mortgage Association (FNMA or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac). Fannie Mae lost $14 billion in FY2010, while Freddie Mac lost $21.5 billion in FY2009. Fannie Mae says it will seek $7.8 billion in Treasury Department aid. Freddie Mac has requested an additional $6 billion from US taxpayers.

Now that the stage has been set, let’s examine WHY Fannie Mae and Freddie Mac are in the news. On Wednesday, November 16, 2011, Representative Darrell Issa (R-CA) had Fannie Mae CEO Michael Williams and Freddie Mac CEO Charles “Ed” Haldeman Jr. to testify before the House Oversight and Government Reform Committee. They were there to defend their salaries. Each of them could take home as much as $6 million apiece in salary and bonuses in 2011. Fannie and Freddie payed out nearly $13 million in executive bonuses in 2010. “It’s hard for them [taxpayers] to understand how executives get $6 million in pay for a failing entity,” said Rep. Carolyn Maloney (D-NY). The salary and bonuses were defended by Williams, Haldeman and Edward DeMarco. DeMarco, defending the salaries and bonuses, said that it was difficult to find qualified people to help run the companies. The CEOs of Fannie Mae and Freddie Mac argued the compensation structures at the mortgage finance firms were needed to retain and attract qualified staff.   (Personal note: how can “qualified staff” lose billions of dollars?)

A House committee approved a suspension of bonus packages for executives at Fannie Mae and Freddie Mac. “Awarding lavish pay packages to the heads of these companies that have accepted $170 billion in taxpayer cash can’t be defended,” said Representative Spencer Bachus (R-AL), chairman of the House Financial Services Committee, and sponsor of the bill to limit bonuses. The committee approved the measure 52-4, sending it to the House floor.

All of this comes amid the Obama administration’s effort to increase mortgage refinancing. White House officials are easing the rules of the Home Affordable Refinance Program (HARP), which allows mortgages backed by Fannie Mae and Freddie Mac to be refinanced at lower rates.  (Another personal note: does anyone see any irony here?)