Wall Street just doesn’t get it
President Obama may have spoken out against executive pay raises and exorbitant bonuses, but that doesn’t mean that the mavens of Wall Street aren’t still trying to squeeze the money train for all it’s worth.
Joseph Giannone reports for Reuters that annual salaries for bankers, traders and staff on the Street could jump “as much as 100 percent in 2009.” Amazingly, this comes after the public outcry against paying huge salary increases to CEOs of companies that received government bailout money. And to think the same fat cats decry payday loans!
Bonuses are verboten, but apparently banks must continue to boost salaries in order to “retain and recruit the best.”
No! I’ll tell you what they should do!
The conditions that exist across America’s economic landscape are treacherous. We stand on the brink of collapse; desperate measures are needed. This is why I would insist that the banking and investment industry enact temporary wage controls. If they are normalized across the board, there won’t be as much worry about losing talent to the bank that pays that much more. For the most part, if young investment bankers are working on Wall Street, it’s because they like the New York atmosphere, not simply because they make a bit more money there.
Consultant Alan Johnson predicts that an executive who received $250,000 in salary in 2008 could now be paid as much as $600,000. This… is… ludicrous!
And… they’re still cutting jobs!
Bonuses are predicted to fall 20 percent in 2009, reflecting “political pressures and continued weakness in financial markets,” said Johnson. I say no bonuses until companies no longer require bailouts! You CAN live on your salary just fine. Suck it up, Americans. This isn’t pat-on-the-back time.
Unfortunately, job cuts also will continue, to the tune of 15 to 20 percent, he predicted. OK, all the more reason to freeze salaries and stop bonuses until we’re out of trouble. People should all pitch is so that unemployment doesn’t continue to grow like mushrooms on a bedraggled lawn.
Don’t explain, don’t justify
Oh, good. Johnson says he advises banks structure bonuses carefully. Provide risk provisions and clawback provisions. With a clawback, a company could – get this – take back money from an employee is they commit wrongdoing. I see slime everywhere in this industry!
“The current model cannot be explained or justified. It is necessary to have a compensation system that is both rational and can be explained and defended,” Johnson said. You’ve got that right, sir. You cannot explain or justify salary increases or bonuses as long as people are being punted into the street.
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If you can afford bonuses for your employees, why not? There’s nothing wrong with recognizing and rewarding hard workers in the company. The only problem with this picture is the people doing it. These wall street junkies are in no position to reward workers for their petty deeds, especially with money coming directly from taxpayers.