Many CFOs Cynical on Banker Bailout Plans

The top financial officers of Corporate America seem to have some doubts about whether the money being earmarked by the federal government to bail out banks will be used wisely, according to a survey.

More than a third of chief financial officers polled by CFO.com believe some of the money will go into executive pay. And almost half believe more money will go into bank reserves and less into actual lending activity.

"CFOs themselves are highly compensated execs ... they sound cycnical and they sound as though they are as disappointed as many in the public are about how the way the bailout is being managed," said Tim Reason, CFO.com editor, on CNBC. "Part of that is a symptom of their deteriorating realationship with their banks." (See his full interview in the video)

The survey was based on responses from 115 CFOs and other top-level finance executives. The majority found that since September the quality of some services provided by their commercial banks has deteriorated in one way or another.

Other findings from the CFO.com survey include:

• 40 percent also said that an outsized amount of the $700 billion devoted to TARP would go to executive performance and retention payments.
• 58 percent also thought that banks would devote a disproportionate amount of that bailout money to acquiring other financial institutions.
• 48 percent additionally thought banks would over-allocate federal funds to strengthening bank reserves.
• 78 percent don't think bailout will help their business in next 2 months
• 39 percent believe the range of services and products available from their commercial lenders had narrowed.
• 84 percent believed banks will require stricter debt terms in the future.
• 32 percent of the finance executives said relations with lenders won't reach some sense of normalcy until the fourth quarter of 2009 or later (4 percent said never).
• 18 percent said that their changes in their relationships with commercial lenders during the financial crisis have placed their company's long-term viability at risk.
• 83 percent are confident of the ability of commercial lenders to "support their business adequately in the next year."

Full survey results from CFO.com can be found here.

• Slideshow: Big Budget Events vs. TARP

© 2008 CNBC.com