Calling The Pitch Fork Brigade

From the Wall Street Journal.

Bonus season is fast approaching and never will it be as scrutinized. With the country facing its worse financial crisis since the Great Depression and taxpayers forking over $700 billion to bail out the nation’s financial institutions, some self restraint would seem to be in order–or at the very least the politically smart move, writes the Finance Professor.

Yet, according to this Bloomberg article, Wall Street won’t be deterred from paying bonuses this year. Merrill Lynch has allocated $6.7 billion, Morgan Stanley has put aside $6.44, and Goldman Sachs Group has $6.85 billion for bonuses.

Most people don’t understand that for Wall Street, more than 70% of yearly income comes from”Bonuses”. It doesn’t matter. If you want to cause civil unrest, I dare the bankers of Wall Streeet to take Billions in bonuses when the tax payers have just shoveled out $700 Billion to save your hide.

Don’t be stupid.

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0 Responses to Calling The Pitch Fork Brigade

  1. woodnsoul says:

    I think that bonuses, as part of a reasonable income, are not the issue. Lots of regular folks live off of tips…

    It is the folks making millions from bonuses that are the issue here – more so now because those bonuses will be paid with our money, and I haven’t seen these short sighted, greedy dunderheads do much to earn it!

  2. douglas newhouse says:

    Bonus is the wrong word–some is really defered comp and some is incentive comp– but the spin is really bad what ever they call it

  3. Armand Asante says:

    deferred comp? incentive comp?
    comp for what exactly?
    They didn’t do a very good job this year (well, i guess it’s more than just THIS year).

    So taking a one-time 70% pay cut doesn’t sound so wrong at the moment. It’s not like in a year’s time it wont be business as usual again…

  4. Jesse C says:

    If you want to argue the executives didn’t do a good job and don’t deserve a bonus, then fine. But there are lots of analysts, associates, and the like who have done their jobs and done them well. To penalize them because management made terrible decisions is unfair, just like it is unfair when auto-makers works are penalized because the American car companies are managed by incompetent fools.

    Comp pools are pretty much all the major banks are down this year, in many cases pretty significantly. Not sure how many employees MorganStanley has left, but at of last check they had over 50,000 which means 6 billion, while high, is not obscene.

  5. Dan says:

    I was reading The Week last week, and I believe what it said was that the Big Five in the investment industry paid out $39 billion in bonuses last year, and they have now racked up $74 billion in losses.

    There should be some interesting shareholder meetings.

  6. JR says:

    They should show the good sense to defer most of their bonuses until we see what the taxpayers get for the assets they are sticking us with.

    If they were made to realize their losses, they wouldn’t have any bonus $$. They’d be out in the street, too!

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