The current administration is set to announce today limits on executive pay at firms taking money from the next round of TARP funding.
Can anyone envision a scenario where the executives of Wall Street firms simply become front men/women for the “real executives” running the operation from behind the scenes. Basically, a few people, who probably would not be able to make it into executive positions on their own merits, are pushed into the top positions at these investment banks, take the limited $500,000 a year salary, while the people actually running the show are quietly behind the scenes, making their normal pay.
I am thinking of the situation of Phillip Green running the Tangiers Casino for Sam Rothstein in the movie Casino, presumably because Rothstein does not want to undergo the scrutiny required to obtain a gaming license. Or Wendell “Orlando” Blocker running Orlando’s strip club as a front for the kingpin of the drug dealing operation, Avon Barksdale, in series The Wire. In both these cases, the front man provided cover for the nefarious backgrounds of those actually running the operations.
Somewhat similarly, would it be possible for a Wall Street firm to push someone into the executive position to take the $500,000 and provide cover for those running the show behind the scenes, who are presumably taking a much larger salary?
UPDATE: Unrelated, since it comes from the first TARP distribution, but interesting. Goldman Sachs Would Like to Pay Back TARP Money, Viniar Says