Strauss-Kahn shall continue to get IMF payments
If there is one thing certain about Dominique Strauss-Kahn's future, it is that he will not be poor the rest of his life.
Even after his resignation, Mr Strauss-Kahn will continue to receive payments from the International Monetary Fund, his employer until May 18 whose image has been tarnished by the sexual-attack charges filed against him.
When he assumed the position of managing director of IMF in November 2007, Mr Strauss-Kahn got a salary of $420,930 a year, net of income taxes. Additionally, he was given an annual allowance of $75,350 to enable him to "maintain, in the interests of the [IMF], a scale of living appropriate to [his] position."
That makes his total remuneration as top honcho of the powerful multilateral financial institution was $496,280 a year in his first year. That's net of all income taxes, says the document which can be viewed on the IMF web site.
Mr Strauss-Kahn's contract with the IMF, which he signed on October 1, 2007 or a full month before he assumed office on November 2, 2007, provides for an annual increase in his salary and his allowance starting in 2008, to be computed on the basis of the official inflation rate in the Washington metropolitan area (where the IMF head office is located).
The contract specified that the annualized inflation rate for May of each year, as reported by the US Bureau of Labor Statistics, shall be used to determine the pay increase that would take effect the following July of each year.
The BLS-computed inflation rate for May 2008 was 5.0 percent, subsequently settled at minus-0.2 percent in May 2009, and rose again to 1.9 percent in May 2010.
PAY INCREASES
There is no IMF document stating changes in Mr Stauss-Kahn's remuneration from the entry-level amounts, but IBTimes estimates that, based on the terms in his contract, his salary should have been increased to $441,976.50 per annum in July 2008, and to $450,374.05 per annum starting in July 2010.
Similarly, his allowance should have increased to $79,117.50 per annum starting in July 2008, and further to $80,620.73 per annum from July 2010 (no increase in July 2009 because of the negative inflation rate).
Based on his contract, Mr Strauss-Kahn's total annual remuneration should have been $530,994.78 from July 2010 until his resignation effective on May 18, 2011.
That comes out to a cool $44,249.57 per month-not including additional perks he was entitled to as IMF big boss.
ADDITIONAL PERKS
He was entitled to reimbursements of "reasonable expenses actually incurred for entertainment directly related to the business" of the IMF.
On top of all that, Mr Strauss-Kahn, as managing director, was also allowed to reimburse per diems, as well as "reasonable vouchered expenses not covered by the per diem."
That last item covers "all hotel expenses, incurred by [Mr Stauss-Kahn] for travel in the interest of the [IMF]." Such allowed expenses also included travel and hotel expenses of Mr Stauss-Kahn's wife incurred during annual meetings of the IMF board of governors held outside Washington DC, as well as in accompanying him on official travel.
Mr Strauss-Kahn's travel on IMF business, as well as upon his appointment and separation, "shall be in first class," the contract mandates. That includes travel by family members eligible to accompany him for these official occasions.
PENSION
After his departure from the IMF, Mr Strauss-Kahn will also receive pension payments in accordance with the terms of his membership in the IMF Staff Retirement Plan.
In addition to that pension, Mr Strauss-Kahn stands to receive an annual supplemental retirement allowance amounting to a certain percentage of the total pension payments he would receive each year under the retirement plan.
These pension payments shall be made to him "from the commencement of this pension and continuing to the duration of [Mr Strauss-Kahn's] life." In the event he dies, the payments shall be made to his spouse, according to the contract.
Mr Strauss-Kahn's contract with the IMF, in requiring him to "observe the standards of conduct applicable to staff members," required him to avoid any conflict of interest but did not require him to divest from any businesses he had prior to his appointment.
In fact, the contract allowed him to manage his private investments and those of his family members "to the extent that the management of those investments does not involve the operation of a business or create a conflict of interest."
SALARIES AT BIG BANKS
Still, Mr Strauss-Kahn's compensation may appear modest compared to the salary packages that big private banks are getting.
For instance, the chief executive officer of Citigroup Inc., Vikram Pandit, has been getting "only" $1 million since 2009 while his bank was in the red following the global financial crisis of 2008-2009. This has been increased to $1.75 million a year starting in January following profits incurred by the bank under Mr Pandit's stewardship.
Prior to the financial crisis, Mr Pandit was given a $3.2 million compensation package for 2007, which rose to $38 million including stocks in 2008, the same year Citigroup reported a loss of $27.7 billion, according to a Bloomberg report.
Also in 2007, Goldman Sachs Group chief executive officer and chairman Lloyd Blankfein got a $97.3 million package including salary, stocks, stock options, and bonuses, a Bloomberg report stated.
In the case of Mr Strauss-Kahn, the terms that covered his employment, particularly on the remuneration, were similar to those granted to his counterpart at the World Bank, the IMF's twin institution under the Bretton Woods Agreement of 1944.
Robert Zoellick also got a starting salary of $420,930 per annum, plus an allowance of $75,350 per annum, upon his appointment as president of the World Bank on July 1, 2007.
Both Mr Zoellick and Mr Stauss-Kahn took over the helm of these institutions in 2007. But while Mr Zoellick started his term with the departure of his predecessor, Paul Wolfowitz, following a scandal involving Mr Wolfowitz's relationship with another World Bank employee, Mr Strauss-Kahn ends his term under scandalous circumstances.
One of Mr Zoellick's recent decisions that had received favorable reaction was the opening up of World Bank documents to the public. Most of the World Bank's documents, except those that reveal policy positions of officers during meetings, can be viewed on the multilateral lending institution's web site.