Jul 23 2009
Bigger Wall Street bailout = Better Wall Street bonuses?
It’s just like the good old days for Wall Street executives. In fact it’s even better.
Despite public outcry and outrage at the multi-million dollar bonuses that Wall Street executives continued to give themselves throughout this recession Wall Street’s biggest players are already setting aside money for more bonuses. And the figures are astonishing.
The top six U.S. banks have set aside $74 billion already this year to pay their employees, up from $60 billion this time last year. Just last week Goldman Sachs disclosed that it had set aside a record $6.6 billion for bonuses (they prefer to call it compensation expenses) in the most recent quarter. They’ve spent $11.4 billion in bonuses so far this year.
Now to be fair Goldman Sachs had an amazing second quarter, earning a record $3.4 billion, but this isn’t the story with all of the banks.
Rival bank Morgan Stanley announced that it had set aside $6 billion so far this year in bonuses even as it took a loss for the third straight quarter. Morgan Stanley, after losing $1.26 billion last quarter, set aside $3.9 billion for bonuses. That’s almost 3/4 of the revenue that they made.
Luckily we have a president that has pledged to stop this kind of thing, right?
“With respect to compensation, I’d like to think that people would feel a little remorse and feel embarrassed and would not get million-dollar or multimillion-dollar bonuses,” said Barack Obama in response to the bailout news.
Well, Mr. President, they are getting multi-million dollar bonuses, at a record pace even. You are the one with the power to change that — isn’t that what you’re all about, change?
Pardon my sarcasm Mr. President, but something (track record, history, nature of their jobs) gives me a hunch that these “greed is good” Wall Street guys aren’t going to change their behavior on their own.
Excellent article guitarman. A couple of weeks ago; I read where AIG planned on doling out a number of bonuses as a means to retain their executives. Apparently these geniuses with their “impressive resumes” had threatened to take their EXPERTISE elsewhere. So much for oversight and regulation!
REALITY CHECK… The issues are: 1) Pay Cuts, Not Bonuses. 2) Who to Terminate. 3) Who to Prosecute. Rewarding Incompetence and Corruption (with taxpayer money) is Total Insanity!