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Photograph from a 2008 protest by Mary Altaffer/AP
Nine banks that received government aid money paid out bonuses of nearly $33 billion last year -- including more than $1 million apiece to nearly 5,000 employees -- despite huge losses that plunged the U.S. into economic turmoil...Six of the nine banks paid out more in bonuses than they received in profit...
Overall compensation and benefits at the nine banks fell 11%, to $133.5 billion in 2008 from $149.3 billion in 2007, the Cuomo report said. But with net revenues falling, the percentage of the firms' revenues dedicated to compensation rose to 45% last year from 41% in 2007.
The report also drills down how much banks got; per the NY Times, "At Goldman Sachs, for example, bonuses of more than $1 million went to 953 traders and bankers, and Morgan Stanley awarded seven-figure bonuses to 428 employees," while the AP notes, "Bank of America, which also received $45 billion in TARP money, paid $3.3 billion in bonuses, with 172 employees receiving at least $1 million and the top four recipients receiving a combined $64 million. Merrill Lynch, which Charlotte, North Carolina-based Bank of America acquired during the credit crisis, paid out $3.6 billion, including a combined $121 million to four top employees."
Noting how the government bailed out many banks, Cuomo wrote in the report, "There is no clear rhyme or reason to the way banks compensate and reward their employees...When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well."
Today, the House is set to vote on whether to curb Wall Street pay.
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That's pretty impressive when you consider that my fiance, who works for a hedge fund that *made* money last year and was not bailed out, didn't get a bonus. His bosses thought it would be smarter to try to maintain the maximum amount of assets and give out bigger bonuses this year if everything went well. These douchebags take billions in government money and get $1 million bonuses? Why do we reward failure?
I think the problem is the wider world sees it as "wall street culture" when really it's these huge firms that are so entrenched that they will never change their ways. All the smaller guys on Wall Street are horrified by this bs too.
it sounds like you're fiance's company may be more fiscally responsible than the banks who paid out more than they made. IMO, i could care less what compensation and bonuses people get as long as their companies are not receiving public $$$.
I think that line quoted from the article is misleading. When I read "paid out more in bonuses than they received in profit," it sounds as if the bank was profitable before paying bonuses, and UNprofitable afterwards.
But if bonuses are part of your compensation costs, then they're already figured in calculating your net profit.
So if my bank's gross revenues are $200, and my non-bonus related costs are $100, then I have $100 left with which to pay my employees, some of which I could also redistribute as dividends. If I pay out $60 in bonuses, then I have $40 net profit, despite having paid out more in bonuses than I received in profit.
It's easy to stir up populist rage at overpaid bankers, but this anti-bonus rhetoric is only really going to hurt the working stiffs. The top earners are running the joint, they'll always find a way to get their share. But shit rolls downhill, and there are still plenty of us taking home $600 a week whose bonuses are going to be vetoed by some line manager or HR rep due to an "unfavorable regulatory climate."
thanks for the insights and i totally agree that the media is just chomping at the bit to stoke populist rage. unfortunately for populists, it's undeniable that millions of people in the USA are gainfully employed at "evil corporations" run by "self-styled masters of the universe."
infuriating
Fucking scumbags.
How come all the crazy people with guns only take out innocent students or family members?