Sign reads: "War On Greed - starring Henry Kravis and his homes" Photo: Brave New Films, on flickr
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If you read me often enough, you have probably noticed that I tend to check various news and opinion sites throughout the TradMed each morning, after I’ve spent a few minutes reviewing emails and jobs sites. Most of the time, I just shake my head at the various levels of stupidity I find, not being able to quite give it the full YOU HAVE GOT TO BE F*CKING KIDDING ME! treatment so richly deserved. Then there are days like today where teh stoopid is so truly dumbfounding.
Today, we have Henry Kravis, co-founder of private equity firm KKR, sending up a fine whine to Bloomberg on how tighter credit rules are forcing the private equity firms to kick in more of their own money and making buy-outs more expensive. Sayeth Mr Kravis:
“As the debt markets tighten and the cost of capital goes up, something has got to give,” Kravis said yesterday at the Bloomberg Dealmakers Summit in New York. “You just have to pay more.”
Kravis, 67, said the cost of capital for a leveraged buyout has risen more than 2 percentage points since the firm agreed to buy Pfizer Inc.’s Capsugel unit in April, forcing buyers to put up more cash for deals and borrow less. Uncertainty in the equity markets also is making it more difficult to reap profits through initial public offerings or sales of companies owned by private-equity funds, he said.
Yesterday morning (Friday, April 8), I was doing my regular surfing of news sites, after once again not finding any jobs in my daily job search when I came across this story from Reuters on the pay that JP Morgan Chase CEO Jamie Dimon received for 2010. The thing that caught my eye most of all however was not the $20.8M in total compensation. Nor was it the $5M cash bonus on top of the $1M cash salary for the year. No, the items that caught my eye were at the bottom of the article on the “perks” Dimon received:
His 2010 compensation also included $579,624 worth of perks, including $421,458 of “moving expenses,” $95,293 to use company aircraft and $45,730 for personal automobile use. Most of the rest went toward home security.
Like many Americans who have had trouble selling their homes, Dimon did too. The moving expenses relate to the sale in 2010 of Dimon’s Chicago-area home, in which he had lived while heading Bank One Corp that was sold to JPMorgan in 2004.
JPMorgan forked over $421,458 last year to compensate Dimon for moving costs incurred as he moved his family from Chicago to New York. Yes, moving is hell, but you don’t know the half of it.
This is the second time in three years that the bank picked up a six-figure sum for Dimon’s relocation – which ended up taking five costly years from end to end. The bank has kicked in $617,734 since 2008 to cover the move.
Now back in the days when I was gainfully employed, I moved a bunch of times for my then employers. I’m single with no dependents other than my feline companion and I’ve always rented so I have not had to worry about selling a home but still, how the hell do you rack up $617k in moving expenses for one move?
I’ve moved myself and the rental truck, time out of the office, overnight lodging and everything when I’ve moved myself hasn’t even reached $1,500 total. I had one employer that paid bonuses to us when we voluntarily relocated for a job and covered the professional moving companies. In those moves, the costs for out of office time, food and lodging, trips to find a new apartment and the actual movers were still under $10K and with the bonuses, added up to a total of $25K. Granted, my household goods fit into one half of one 18 wheel moving truck and the apartments/town homes/houses I’ve rented were generally in the 1,200 to 1,700 square foot range rather than nine bedroom mansions.
As well, I do wonder how a person racks up $45,730 worth of “personal automobile use” in a year’s time. The 2010 IRS mileage rates were 50¢ per mile and I seriously doubt that Dimon actually drove himself 91K miles during the year (45,730 divided by .5). Maybe this is what they paid for Dimon to have a personal chauffeur? Is this figure deductible by JP Morgan Chase on their corporate taxes? Since tax payers have already subsidized the bank bail outs, it would not surprise me that we continue to subsidize them and their lordly ways.
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