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Wall Street Firms Looking to Circumvent TARP Bonus Caps Via Salary Increases

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I know one can maintain outrage for only so long, and I find it deeply disturbing to look at the inability to rein financial industry pay in despite horrific results. If these people are so valuable, let them go to boutiques and prove it, where you eat what you kill rather than feed off a big corporate plate. Companies on government life support should not be taking risks with taxpayer money, they should be cleaning up the dreck and focusing on relatively low risk business (even though the incentives are to do the reverse). That posture does not warrant paying up for largely mythical talent.

And as to “what can we do about it,” yes, venting here is good for one’s mental health, but does not advance the ball much. The powers that be are sensitive, however, to what plays in the MSM. The big reason the TARP passed despite considerable public opposition was that the media fell into line. Doubtful Congressmen did not have the air cover they needed.

So ping your Congressman, but also send posts that make points you think the media is overlooking to the editorial page editor of your city paper. Other reader suggestions for making the fourth estate aware of the growing unhappiness among the fleeced taxpayer class are welcome.

From the Wall Street Journal:

In response to expected bonus restrictions, officials at Citigroup Inc., Morgan Stanley and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees, people familiar with the situation said…..

The discussions are at an early stage, partly because the government hasn’t yet issued specific rules on the bonus payments that will be allowed at companies that received TARP aid. The talks also are proceeding cautiously because of the political volatility of pay, bonuses and perks on Wall Street, including outrage over American International Group Inc.’s promise to pay $450 million in bonuses to employees in the insurer’s financial-products unit.

Yves here. So these changes are being negotiated, meaning whatever emerges will have been sanctioned. Lovely. Back to the article:

Most traders and bankers on Wall Street get a base salary of anywhere from $200,000 for managing directors to $1.5 million for a chief executive. But the lion’s share of their pay comes in the form of a bonus, a tradition that began when most firms were private partnerships and partners shared directly in the annual income of the firm.

As banks and securities firms wrestle with growing regulation of compensation practices, substantially increasing the base salaries of top employees could become a popular response, some industry officials say. A larger salary would reduce the relative importance of bonuses but also help financial companies increase those payments, since they usually are calculated as a percentage of total annual compensation.

Yves here. Notice the peculiar use of present tense, “their pay come in the form of a bonus,” as if it’s an entitlement? No profits should mean little to no bonus.

Readers can correct me, but my recollection is that salaries for mid and senior level people in the mid-late 1980s were in the $100,000 to $125,000 range. Compound that forward by 3% inflation, you get around $200,000. And while bonuses were bigger than base comp in a lot of areas in most years, they were nowhere near as large as in recent years. And back then, everyone accepted that bonuses were heavily dependent on overall firm results. Back to the article:

“The trend is to increase the base pay in light of the reduced bonuses,” said Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable. “Without the revenue” that top performers provide, he adds, “these companies can’t survive.”

Yves here. I cannot believe these lobbyists can say this stuff with a straight face. These companies are not surviving with that supposed talent in place! I guess Mr. Talbott is the only person in America who missed all the media report of how the only thing between these firms and bankruptcy is plenty of government checks. So we are supposed to pay up for the people who drove these companies off the cliff so they can have the opportunity to do it all over again? The Journal does present more reality-based views:

“These are not bureaucratic positions where you’re paying individuals high salaries,” said Michael Karp, chief executive of Options Group. “How can you pay a banker a really high salary without knowing what kind of revenue that person generates?”

Still, critics are ready to pounce on any potential maneuver around the federal limits. Raising base salaries would play into “a long and dishonorable tradition of responding to any attempt to curb pay excess by just putting it in a different pocket and calling it something else,” said Nell Minow, editor of the Corporate Library, a research firm focusing on corporate-governance issues. Any attempt to get around bonus curbs “can expect pushback from shareholders,” she predicted.

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40 comments

  1. Anonymous

    We should replace executive class with ‘criminal class’. The temerity of their actions speaks well to their intent. They are NOT citizens, but a
    new type of terrorist. They should be treated no better than those at GITMO.

    They are villains and should be treated as such.

    EXECUTIVES ARE TERRORISTS!

  2. Carrick

    IDEA:

    I posted this earlier. How about a collection of prominent finance/econ bloggers and professionals, team up and write an open letter to the AIG mgmt giving them 48 or 72 to submit a written justification for each individual bonus. Similarly, bonus recipients must can submit a justification. The responses will be posted online along with the pictures and names of the individuals.

    If the open letter gets enough prominent signatures, who cross-post it on their blogs in coordination. Hopefully, it catches on w/ secondary media (HuffPo, Daily Beast, etc) and gains public support. Maybe that snowballs and a few Congressmen make mention of it.. and eventually the AIG folks get cornered into complying.

    Its enough distance for Congress to support but not face Wall St wrath for cooking up. The public doesn’t have to do much but care and spread it.

    The “justifications” will probably all be fluff, but it’ll be something on record AND it will shift the tide to where they are in the daylight and in the habit of accounting.

    Just needs a coordinated effort by important, credible, visible people. Bloggers are ideal, b/c they have some independence and.. what’s to lose? There needs to be some bridge between the angry taxpayers and the established media — bloggers and OpEd folks have the clout and voice.

    Thoughts?

  3. Benedict@Large

    Tax policy can substitute where morality fails. Time to jack the top marginal rate back up to 90%. Then they can pay these “top performers” all they want.

  4. Bonesetter Brown

    @Benedict – yes, 90% marginal rate is where this is headed if nothing is done (or at least to a much higher rate than anything in modern memory)

    I prefer a 90 day amnesty period to admit fraud and pay some retribution (past bonus, cap gains, some kind of hefty fine, whatever).

    At the end of the amnesty period begins the largest special prosecution in history. Maybe fund it with a cool $5B-$10B from one of the bank bailouts. Go for fraud, RICO, etc. Put people in jail and seize assets. Probably a much better RoI than any of the other alphabet-soup programs.

  5. Carrick

    p.s. – the incentive to comply, beside initial taxpayer/media/Congressional pressure, is seeing their names and faces mounted in the public square, and their open “hiding” from explaining the service they’ve provided to salvage AIG. In the very least, it’ll increase the snowballing of public sentiment against AIG, as their each individually visibly attempt to scatter. Maybe it even begins to flush out some impression of who is doing good work, and who is being paid off to keep quiet. Anything that gets AIG talking is good.. like a police interrogation.

  6. alex black

    I smell a rat. Even Obama made headlines today calling the AIG bonuses outrageous, so that’s getting attention. But it seems like he’s pointing to the little pigs running off with their millions in their little bonus buckets to keep us from looking at the dump trucks of money being sent off to European banks and hedge funds through AIG. Which is the bigger outrage – the millions to the little crooks, or the tens of billions to EU banks who decided to gamble with CDS’s, not bothering to do their due diligence on counterparty risk? Let Europe bail out their own stupid fucking banks.

    I mean, who are the REAL criminals getting the REAL money here?

  7. Anonymous

    Yves wrote: So we are supposed to pay up for the people who drove these companies off the cliff so they can have the opportunity to do it all over again?

    Yes. But next time they will employ their genius and creative minds to do it slightly differently.

  8. MyLessThanPrimeBeef

    Let’s face it, the financial industry since the summer of ’07 is like New Orleans after Hurricane Katrina, nay, in fact, worse than Katrina…and if the government had been on top of things, they whould have declared that sector a federal disaster area, imposed martial law and sent in crack FEMA storm troopers to make sure no one gets any salary increase, much less any bonus. Suspend habeas corpus. Terminate all existing contracts. Looters, whether in Armani suit or T-shirt and jeans, of course will be shot on sight.

    It’s still not to late to do that…I know many, including those from this blog and others, will volunteer to enlist in FEMA.

  9. Anonymous

    Maybe its just because I’m watching The Wire right now, but I feel like this should be approached like any organized crime police investigation.

    When public pressure is strong enough, police investigate then pinch the smallest players, and work their way up.

    Do this open letter thing to mobilize taxpayer anger and bridge the gap between them and the OpEd crowd who have Congress’ ear. It’ll get AIG on the defensive and the media and govt in the habit of expecting answers from AIG.

  10. Anonymous

    Other reader suggestions for making the fourth estate aware of the growing unhappiness among the fleeced taxpayer class are welcome.

    How about dumping AIG execs holding their derivative contracts into Boston harbor?

  11. Anonymous

    …oh and Yves, I like how you refer to non-insiders as “the taxpayer class” which highlights how these jokers don’t even pay taxes.

  12. Doc Holiday

    It’s nice to see that spirit and fire in you Yves and as usual, I can’t keep my mouth shut or stay away and let this crap slip into the shadows. I think we are all growing increasingly fatigued by this on-going wall street orgy — which seemingly has no end. I think there comes a time in the course of some events, like genocide, when people are just in shock and stunned and they slip into denial, emotionally unaffected by atrocities they are unable to process. People are at a point between rage and bewilderment and I wonder how long this condition can be bottled up?

    The idea of cultural shock and the current financial armageddon reminds me of The Scream

    IMHO, people simply need to wake up and boycott all activities associated with all these corrupt wall street companies that depend on fraud and piracy. I doubt anyone would be shocked to read that AIG provides insurance for The White House and The Treasury and all the cars, boats, china, art and other stuff that needs to be linked to tax-free derivatives in Bermuda that are held by reinsurance pirates that swap loot between Switzerland and The FASB accounts … wait, I digress there …

    Nonetheless, I’m curious as to who, at this point does do business with AIG and what services or products are out there that will survive. AIG has a great web page (worth billions) — offering highly popular products like auto, life, retirement services and more — and then, to top it off, they allow you to see their latest stock price, which is at 33 cents — as if there is some correlation between their fiduciary trust with your insurance policies (and your trust) and the current mark-to-market accounting values — that are backed in full by American Taxpayers.

    I’m actually a proud that AIG is at 33 cents and I’ll be an even happier American when AIG hits 12 cents later this year. Since AIG is too big to fail, the final goal in this game of pin the tail on the retarded insurance pirate, should be to go closer and closer to zero and then burn up as much of Americas wealth as possible … yah know! That is American Ingenuity in this new age, and thank God we have people at place like AIG that will remain in place to help move us into the next era of prosperity; what would we do without this group of retarded crooks that rely on piracy and nepotism?

    To offer confidence, AIG provides this PR: Since our founding nearly a century ago, the AIG Companies (Collectively “AIG”) have focused on being a leader in corporate social responsibility. ** (does that sound right?)

    This really is a great AIG joke: Director, Executive Officer and Senior Financial Officer Code of Business Conduct and Ethics

    X. Protection and Proper Use of Company Assets
    All directors, executive officers, and senior financial officers should protect AIG’s assets
    and help ensure their efficient use. All AIG assets should be used for legitimate business
    purposes only.

    XI. Compliance with Laws, Rules and Regulations
    General Compliance. It is AIG’s policy to comply with all applicable laws, rules and regula-
    tions in the countries in which AIG engages in business.

    Insider Trading …. Hmmm, what about tax evasion and what about fraud? How did these retarded scum find a way to burn so much money and then get rewarded taking part in the worst financial hijacking in American history?

    This is mind blowing stuff, to think that a select group of crooks can keep their jobs, not be accountable and then be rewarded for stealing. Does anyone really understand that?

    If Obama had the balls (he obviously doesn’t) he would lay out a wide-range of facts, e.g, facts of how many kids in America are trying to go to college in 2009, 2010, 2011 and then give us a ballpark figure as to how much these collective kids have to borrow, how much collective interest they have to pay back and then compare that amount of money being given to these pieces of shit at corporations like AIG, et al that are stealing the future away from these kids! These American kids need taxpayer revenues a hell of a lot more than the corporate garbage bags on wall street that should be in prisons!

    It is disgusting that these crooks are being given continual, uninterrupted green lights to take more and more and more — while a group of highly unethical and retarded politicians sit by and compound the absurdity of this insanity! This is a feedback loop, where wall street cancer is feeding off political cancer and together, they are killing off Americas future.

    I’m sorry to go off here, but this mess is no where near being sorted out and it is sickening to watch that crap-bag shill Bernanke roll the dice and suggest the recession will be over near the end of 2009 — where the hell did he get his model from AIG? What a bunch of retarded stupidity to sell even more bullshit to Americans, at a time when we need truth and justice!! Why, in a time when confidence is needed do we have a PR campaign to bullshit people? Did Obama not watch The Bush years and The Iraq sales job and the resulting lack of trust associated with selling bullshit? History is repeating itself in just 8 short years, as if Americans have no memory of being lied to, but it’s déjà vu all over again and apparently, not a minute too soon! Damn, that was fast, but change can do that!

    Also see: Government loans, spending or guarantees to rescue the country’s financial system already total more than $11.7 trillion, according to data compiled by Bloomberg. 

    Since the start of the year, investors have focused on the rise in Treasury sales as the Obama administration raises funds to pay for the $11.7 trillion bailout of the banking system, as estimated by Bloomberg calculations, and the $787 billion economic rescue package. The economy may contract 1.8 percent this year, after expanding 1.1 percent in 2008, according to a Bloomberg survey of 65 economists.  
     
    New York-based Goldman Sachs Group Inc., another primary dealer, estimates the U.S. will almost triple sales this year to a record $2.5 trillion.  

    Then see: “Before we do the credit cards, we are actually not done with the mortgage [crisis] – the worst of that is yet to come in fact. The thing about mortgages is you can predict when they are going to reset and you can sort of see what is coming. We easily have another 12 to 18 months of pretty ugly times in terms of mortgage resetting. … Credit cards are next.”

    Sorry about that all, but I feel better now, and I knew there was a reason I stopped doing this….

  13. The Old Man

    This bit seems especially odd to me:

    “A larger salary would reduce the relative importance of bonuses but also help financial companies increase those payments, since they usually are calculated as a percentage of total annual compensation.”

    So, i take this to mean that–

    (a) a larger base salary reduces the relative importance of bonuses to total pay received,

    AND at the same time,

    (b) it will increase the bonus pay relative to salary because bonuses are calculated relative to base salary.

    So, unless i’m not understanding it correctly, then this is actually a “decrease” in pay now, but will further ratchet up bonuses once times get “good” again.

    hooray.

  14. An ex corporate HRD - European style

    So we are supposed to pay up for the people who drove these companies off the cliff so they can have the opportunity to do it all over again?

    They will stuff themselves with the money available as long as it is available.

    There are three ways to stop the disaster:
    - fire them all, do not do that, the cost of firing will be handled by themselves, it will be even more costly,
    MORE EFFECTIVE,
    - jail them or at least sue them in a rough context with rough ad hoc legislation,
    EVEN BETTER,
    - let the banks fail.

    Any alternative will fail miserably.

  15. Anonymous

    Doc,
    So as one of those recent students (thankfully school loan debt free), should I pay off my credit card asap?

  16. doc holiday

    Anon @ 2:43 AM Earthtime,

    If you were my student, I’d slap you and say, wake up, wake up and slap you again, then hug you and forgive you for asking me that. We all have debt and need cash and IMHO people need to exercise great care in doing DD. It is a great time to pay attention to details and to focus and to not jump from one fire into the next. This is an age of caution, where you must stay healthy and be as productive as possible.

    Also see: Credit Card Management & Peripheral Factors Influencing Risk

  17. Swedish Lex

    A fresh example from the old continent to compare:

    The top management of the Swedish SEB Bank, one of the country’s largest, agreed to cut bonuses altogether which made sense since the bank in the past year had been forced to raise capital, take significant write downs and see the price of the share fall dramatically. In addition, the Government’s bank protection scheme put effective caps on executive compensation. To be clear, the SEB Bank is not receiving state aid. The caps are there for banks that wish to remain eligible for future, potential, state aid. Too much compensation to the top execs, and the bank is barred from significant parts of the bailout program.

    So, the SEB BoD cut bonuses but instead raised the base salary for the CEO and a few others. Sounds familiar? The authorities then simply issued a communication that one of the country’s largest banks instead of protecting itself, customers, employees and investors had chosen to raise the salaries of top execs. The Government cannot express an opinion, of course, but admitted that it was “surprised”.

    The past week or so has seen a revolt among the bank’s customers, employees, media etc. The Prime and Finance Ministers have expressed disgust. The CEO’s and the BoD’s reputations have been severely tarnished.

    A battered CEO has backtracked entirely and has publicly apologised. The bank is now, surprise, seeking to rearrange exec compensation in order to remain eligible for state aid.

    It is not more difficult than that, really.

  18. bb

    i don’t agree these ‘top perforers’ provide any revenue: they are put in a position to manage relationships and make deals more or less on a cookie cutter line and hardly attract new business, but at best make competitive offers when asked for 2nd opinion.

  19. weilim

    I don’t quite understand why AIG would have to pay the counter parties billions of dollars? Why can’t they just unwind the contracts and pay billions in counter parties premiums that they paid to AIG?

  20. OSR

    The fact that shareholders are more likely to discipline these banks than the gov’t ought to tell you everything you need to know. You’re going to drive yourself mad preaching to the choir.

  21. eh

    Presumably if a bank accepts TARP money (no bank should be forced to) or any other form of government financial aid, then the government ought to see to it that it gets an ownership stake as well as seats — at least one — on the board. From there it can set or influence compensation policies.

    If that does not or did not happen then people ought to be complaining more about how incompetently the government has handled the whole mess and less about how much people at banks ‘earn’.

    All of this hot air about pay is getting old.

    Banks need to make profits; one reason is to pay back TARP money. Just maybe they need to reward their top people — e.g. traders — to make that happen.

  22. Anonymous

    Surely we expect that compensation would match contribution. This is why, even in a company that has earned a loss – some folks still get raises and bonuses and promotions ,etc. It would be illogical to argue that compensation is merely a function of profitability. If that were so we would also be saying that there should not be any merit-based pay. What strikes me in many reactions is the over-the-top attitude – that we should somehow be sure to clawback “100%” of these bonuses, etc. We need to ask ourselves – if we were the owners of a money-losing bank that had a chance of recovery over the medium-to-long term would we be seriously telling our staff that everyone earns the same based on title and there is no possibility of earning more for higher performance? Certainly not, as it wouldn’t help the value of our ownership stake one bit!!

    That said, what this flap does show is the misguided philosophies behind the bailout. It makes no sense to bailout institutions to keep them in their current form but then complain that they keep doing what they did before. That’s like rewarding a dog for stealing your dinner and then beating him later in the evening for the same offense. I say liquidate these firms and throw the employees out. The govt says “save the firms” and then tell them everyone should earn the same amount of money. I don’t understand why this makes sense.

  23. Anonymous

    These people are so brazen that I can be %99 sure that they feel so entitled to pay lower taxes that have broken tax laws many times in the past. So here is my solution, forget about pay, just unleash tax accounts from the IRS on these people and I can guaranty that jail sentences will come from it. Sort of like Al Capone…

  24. Anonymous

    Fascinating and shocking Zero Hedge link. Is this really true that TARP investments have already lost 40% of their value? Is this because we overpaid for the assets to start with?

    I’d be interested to read more discussion about this.

  25. Moopheus

    “How about dumping AIG execs holding their derivative contracts into Boston harbor?”

    Unfortunately, that’s no longer quite the instant death sentence it would have been a decade or two ago. The harbor is no longer more toxic than the paper the banks are holding. Of course, maybe it would be better if they just contracted an irritating incurable skin condition that would cause them to scare children and become pariahs in polite society.

  26. Anonymous

    There is an alternative solution to eliminating bonuses and other extreme compensation at any bailed-out company or bank. The government could pass a special tax that applies to every employee of any bailed-out entity. That tax would be 100% of any bonus and any compensation beyond $500,000. The tax could be further enhanced by taxing income above $300,000 at say 60%. This tax structure would allow all of the companies to meet their contractual responsibilities and the taxpayer would recoup all of the money being thrown around in the system.

  27. Anonymous

    Yves, your suggestion to contact the MSM and Congress is naive.If you look at who owns/controls the media do you really think they care? Congress is a joke, bought and paid for by the lobbyists. Sure send a letter to your local congress person and in a few months you will receive a form letter.

  28. Anonymous

    Yves writes “The powers that be are sensitive, however, to what plays in the MSM. The big reason the TARP passed despite considerable public opposition was that the media fell into line. Doubtful Congressmen did not have the air cover they needed.”

    Sorry, I can’t believe that for a nanosecond. The media don’t have power, they *serve* the PTB. The only reason there is any discussion of this stuff now is the shadow bank run that occurred during that time-I believe you reporte4d on this yourself, Yves.

  29. Cat

    Please everyone write your Federal congress-critters. They may be paid for, but they are becoming afraid. We can’t get to corporations be we sure can lay our hands on our representatives. Literally. They have to face us in the end.

  30. thor heyerdahl's left shoe

    From doc holiday: “Government loans, spending or guarantees to rescue the country’s financial system already total more than $11.7 trillion, according to data compiled by Bloomberg.”

    Let us further consider total mortgage debt in this country is somewhere around $10-11 trillion. Total credit card debt is around $5 trillion. So we (taxpayers) have pledged to cover the entire value of all outstanding mortgages and a nice picee of the cc debt already. And with nothing but further kvetching from the corp’s that it’s not nearly enough.

    Could you imagine the fact of no one in American having mortgage debt? Of course that idiot Santelli would get a thrombo arguing over such horrid communism. But if you give it to corp’s (or is it corpse now?) then that’s “safeguarding the free market”.

    Is it really going to have to come to declaring open season on those with 9-digit net worth and above? Maybe that’s why the govt is keeping those 150,000 armed and trained army guys out of the US…

  31. thor heyerdahl's left shoe

    From doc holiday: “Government loans, spending or guarantees to rescue the country’s financial system already total more than $11.7 trillion, according to data compiled by Bloomberg.”

    Let us further consider total mortgage debt in this country is somewhere around $10-11 trillion. Total credit card debt is around $5 trillion. So we (taxpayers) have pledged to cover the entire value of all outstanding mortgages and a nice picee of the cc debt already. And with nothing but further kvetching from the corp’s that it’s not nearly enough.

    Could you imagine the fact of no one in American having mortgage debt? Of course that idiot Santelli would get a thrombo arguing over such horrid communism. But if you give it to corp’s (or is it corpse now?) then that’s “safeguarding the free market”.

    Is it really going to have to come to declaring open season on those with 9-digit net worth and above? Maybe that’s why the govt is keeping those 150,000 armed and trained army guys out of the US…

  32. Anonymous

    Strappado

    Its the same old policies,
    But now they’re aimed at you,
    The people of the ‘homeland’,
    Will soon be living in a zoo …

    The same elite regime,
    Is still “kicking ass”,
    Serving up macho deception,
    From the financial class …

    Its the same evil policies
    Of extra-judicial killing,
    Its a wholesale slaughter,
    Of the ignorant and unwilling …

    The prep school puppets,
    Still administer the secret beatings,
    They are hidden in the words,
    Of their disingenuous bleatings …

    Will the people of the ‘homeland’,
    Once again sit silently by,
    Now that they are being tortured?
    Now that they will have to die?

    Will scamericans now accept,
    Their own ‘extraordinary rendition’,
    From the state of middle class calm,
    To the state of a poverty condition?

    It is time to do now,
    What you should have bravely done then,
    Rip up this hijacked ‘rule of law’,
    And start over again …

    ————–

    As for peaceful remedial measures — organize street protests and boycotts and keep exposing the hypocrisy (it becomes easier as each day passes as it is all unraveling so quickly now)!

    Writing elected officials is an energy dissipating waste of time. The only government official you should write is your supervisor of elections. Inform him/her that you are boycotting the electoral process as a “Vote of No Confidence in Government” and demand a more open and accountable electoral process, with REAL socialists on the ballot. Collect voter registrations cards in transparent fish bowls marked BOYCOTT! in every city in the nation. List the numbers collected on line and tout the ‘No Confidence In Government’ result. Include those almost fifty percent in total number of Americans who do not bother to vote in each election cycle because they know it is a corrupt scam.
    Get your coping skills in order – avoid physical conflict, they will use it as an excuse to clamp down and shut off all protest. This is a pivotal time in history and these pricks will not give up easily. But they, and all of their sell out scum bag collaborators, are going down. Hard!

    i on the ball patriot

  33. Taunter

    Yves:

    The behavior of management at AIG and Merrill is disgusting. The government should have run AIG through the bankruptcy process in the fall (guarantee the domestic insurance business and let the rest fall away), and indeed should still do so.

    However, the word “bonus” is as distracting as the word “nationalize.” Replace all mentions of “bonus” with “deferred compensation” and see how outraged you are.

    The point is that some guys were hired to work for $7mm/year. Instead of having their pay divided equally over 24 pay periods, they have $200,000 paid over the year and $6.8mm paid in a lump sum. Wall Street will belatedly realize this is a silly system and move to more even distribution.

    Saying that most “bonuses” do not have written contracts or are variable based on performance is a bit like stiffing a waiter on the grounds that there is no bright line rule specifying 15%, 18%, or 20% – the terms of trade call for a payment range.

    The Detroit Lions did not win a single game last season, but Calvin Johnson was paid every one of his $6.3mm.

    http://tauntermedia.com/2009/02/23/be-careful-what-you-ask-for/

  34. Anonymous

    Hey Doc, hear more scream. We blew through 11 trillion on our National debt to the penny today, now some $11,033,157,578,669.78, and hardly a bleep from MSM.

    The Federal Reserve, the central bank of the United States, influences money and credit conditions in the U.S., supervises and regulates banking, maintains the stability of the financial system. This can only be seen as failure. And failure to realize this system has failed, has effectively cancelled our future.

  35. Anonymous

    Taunter said – “The behavior of management at AIG and Merrill is disgusting. The government should have run AIG through the bankruptcy process in the fall (guarantee the domestic insurance business and let the rest fall away), and indeed should still do so.”

    The behavior of the government is disgusting.
    The domestic insurance business is disgusting.
    Comparing the wage structure of a waiter to management at AIG and Merrill is disgusting.
    The adoration of overpaid sports goons is disgusting.
    Brainwashed parroting scamericans are disgusting.
    The scam ‘rule of law’ is disgusting.
    The “deferred compensation” of management at AIG and Merrill is outrageous and disgusting.

    Yves rocks!

    Deception is the strongest political force on the planet.

    i on the ball patriot

  36. Mike Sankowski

    I do not know how guaranteed bonuses were considered performance related compensation. It does not make any sense.

  37. Anonymous

    Passing a new tax to recoup these bonuses is stupid. If the US Treasury Secretary doesn’t pay his taxes, what makes anyone think that these bankers are paying taxes?

    Silly rabbit, taxes are for the little people!

    I agree with others, it’s very two-faced for Obama, Bernanke, and Geithner to act all outraged at the piddly bonus money when they are handing over 1000x that in bailouts.

    If these guys are so damned outraged, then they need to:

    1. Take back all the bailout money
    2. Fail any companies that can’t pay it back NOW
    3. Let insurance holders, bold holders, and any other interested parties, sue the credit rating agencies for fraud. I’m sure we’d find out all kinds of interesting things during the discovery phase of one of those lawsuits!

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