The New York-based credit card giant, American Express (NYSE:AXP), said it paid the Treasury Department Wednesday $340 million to redeem warrants issued under the TARP program, making it the second largest U.S. bank, after Goldman Sachs (NYSE:GS), to repay the american taxpayer.
AmEx, which was one of many financial firms that received bailout money amid the accelerating credit crisis that led to the collapse of Lehman Brothers Holdings Inc. (OTC:LEHMQ), said it paid a total of $74.4 million in dividend payments on the TARP loans and the repurchase warrants, allowing the U.S. Treasury to rake in a 26% annualized return on its investment.
The credit card and travel services company last month bought back $3.39 billion of preferred shares it had issued to the government under TARP. The warrants would have let the government buy 24.3 million shares.
American Express said the cost to buy back the warrants in part reflects the company’s rising PPS. By repaying the warrants, the banks are now completely free of any government restrictions regarding executive compensation and other issues.
AXP shares lost AH 3 cents, or (-0.11%), to $27.72 in New York Stock Exchange trading.
Government Capping Compensation?
The government is not improving the lot of shareholders, but is escalating its own intrusion into the boardrooms of America.
http://pacificgatepost.blogspot.com/2009/07/government-capping-compensation.html
Sweeping expansion of government incompetence into corporations is an invasion that will not be reversed. In the meantime, there is need for a fix in the process of corporate governance.