Executive Bonuses: Information on FDIC's and RTC's Executive Bonus
Programs (Letter Report, 10/01/93, GAO/GGD-94-15).

Was it reasonable for the Federal Deposit Insurance Corporation (FDIC)
and the Resolution Trust Corporation (RTC) to pay sizable bonuses to
their executives during 1991 and 1992, especially given the ongoing
recession and the decision by other financial regulatory institutions to
award much smaller bonuses to top management? GAO concludes that the
bonus decisions at FDIC, RTC, and other financial institution agencies
are a matter of executive judgment because each has authority to set the
compensation of its employees and no law limits the number or amount of
bonuses that can be paid to their executives.  FDIC's and RTC's bonus
programs seemed to generally incorporate the controls required for
Senior Executive Service (SES) bonus programs, with two exceptions that
relate to establishing formal performance review boards and to setting
individual performance plans for each executive at the start of
performance periods.  The absence of these controls can have some
detrimental effects.  Given the subjective nature of performance
appraisals and the authority of agency heads to make final bonus
decisions, however, it would be difficult to conclude that the bonus
decisions at FDIC and RTC would have been any different if the controls
required in the SES program had been a part of the bonus programs at the
two agencies.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-94-15
     TITLE:  Executive Bonuses: Information on FDIC's and RTC's 
             Executive Bonus Programs
      DATE:  10/01/93
   SUBJECT:  Internal controls
             Federal corporations
             Executive compensation
             Salary increases
             Employee incentives
             Oversight by Congress
             Personnel management
             Budget authority
             Funds management
             Merit compensation
IDENTIFIER:  RTC Executive Bonus Program
             FDIC Executive Bonus Program
             Senior Executive Service
             SES
             
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