NCAAbbs

http://chris-floyd.com/component/content...ilout.html

"Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government's cash has been poured in on the condition that excessive executive pay would be curbed."

Let me get this straight... the USG is giving the banks $700b, and they're paying out 10% of that sum in bonuses to the people who drove these companies into the ground? The mind boggles.

"Germany's Deutsche Bank said many of its leading traders would join Josef Ackermann, its chief executive, in waiving millions of euros in annual payouts."

Yeah, the Germans still have a sense of obligation (or shame) which is sadly lacking on Wall Street. Can someone please explain to me what these guys did to earn this money?

"The bonuses offered to Morgan Stanley's top dogs were greater than the entire stock market value of the entire company, after the firm's worth had been destroyed by, er, Morgan Stanley's top dogs."

Yeah, that pretty much says it all.

Um, that's the compensation structure. The losses are paper losses at this point and partly come from an accounting rule. There is no doubt that these turned out to be bad investments but the banks are not the only guilty party.

I tell you what, for every person who does not get well or dies in a hospital, for every pro athlete who doesn't perform, for every failed advertising campaign, for every dissatisfied customer at a restaurant, for every lemon car sold, for every piece of software that doesn't work, for every trial lost, I want those responsible for those items to not get paid and not only will they not get paid but I want them to have to pay back some of their compensation.

It's the way the compensation structure is set. Most of them have relatively modest salaries so their compensation comes from bonuses, which they don't get until until 1. The bank sets the bonuses in December and 2. they stay with the firm until the bonsuses are paid, which is typically around March. This means that they are paid HEAVILY in arrears. For example, one of the guys I work with recent left the company to go to travel for a year. He is leaving a lot of money on the table in bonus pay, despite the fact that he earned it.

I think the key word here is BONUS.


I always thought you got bonus' for a job well done.

Goldman Sachs has already said they will reduce bonuses across the board and will be sensitive to payouts based on the government assistance they are receiving. Let's hope the other banks will do the same

Bonuses were going to be reduced anyway because of the downturn. Another thing to consider is that there are many, many lines of businesses within an investment bank that did not make the bad investment decisions in CDOs, CMBS, etc. They should not be punished for investments by other groups gone bad.