New York (HedgeCo.Net) – Financial institutions that have received generous assistance from Congress may be forced to restrict executive compensation and their dividends, if Barack Obama and his new Treasury have their way.

“Those receiving exceptional assistance will be subject to tough but sensible conditions that limit executive compensation until taxpayer money is paid back,” said Larry Summers, who Obama chose to head the White House National Economic Council.  He also said they would ban dividend payments beyond the minimum amounts while putting limits on stock buybacks.

Obama has expressed his disappointment with the current administration and the lax oversight in doling out the first $350 billion of the bailout, along with failing to focus on areas like housing and consumer credit.   Summers tackled the subject in a letter to Congress yesterday that outlined the issues Obama supports in distributing the other half of the $700 billion Troubled Asset Relief Program.

Summers told Congress that the President-elect believes there has been “too little transparency and accountability,” among the financial institutions.  In addition, Obama believes the executives acted irresponsibly and did not provide enough support for small-businesses owners.  Small businesses and community banks are where more of the money needs to be directed, Obama says.

In addition, he wants to provide help to struggling homeowners in order to avoid foreclosure, along with providing enhanced oversight of the relief program which includes public accounting to see how the money is being spent.

The House of Representatives will vote on a proposal this week that include some of the restrictions outlined by Summers.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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Tags: accredited-investors, bailout, barack obama, businesses owners, community banks, consumer credit, current administration, dividend payments, dividends, executive compensation, financial-institutions, generous assistance, hedgeco, larry summers, lax oversight, national economic council, president elect, stock-buybacks, taxpayer money

New York (HedgeCo.Net) – GLG Partners started off the new year by suspending its dividend payments, after capping off a year that saw a steady decline in share value. 

This is the first time that GLG, who used to manage $24 billion, has done away with the dividend since it was listed in late 2007.  However, with hedge funds seeing a record number of redemption requests, GLG, along with other hedge funds may be trying to salvage as much capital as they can.  GLG currently manages an estimated $17 billion.

“We have decided at this time that it is prudent to retain capital rather than continue paying a regular quarterly dividend,” said Noam Gottesman, Chairman and Co-CEO of GLG.

2008 was a tough year for hedge funds across the board.  The $3 trillion that the industry was thought to manage at one point, should dwindle down to about $1 trillion, experts say.  On average, hedge funds dropped about 19 percent in 2008, according to the Credit Suisse/Tremont Hedge Fund Index.

Shares of GLG closed at $2.27 yesterday, dropping over 80 percent since March 2008.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com

Tags: accredited-investors, ceo, credit-suisse, dividend payments, glg-partners, hedge-fund-index, hedgeco, index shares, new year, noam gottesman, quarterly dividend, redemption-requests, salvage, share value, sister-sites, steady-decline, tremont-hedge-fund-index, trillion