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Who is ready for their morning dose of anger? That is what I thought this morning when I found out about the higher pay at some investment banks following the recent bailouts. Well, let me qualify that -- it isn't necessarily higher pay, but some execs will receive the same amount as they did before the bailouts. Some Wall Street firms, enjoying improving profits are on track to "pay employees as much as, or even more than, it did in the pre-crisis days." The top six U.S. banks have set aside $74 billion to pay employees, up from $60 billion last year, according to the Washington Post.
This increase in what are known as "set-asides" has not gone unnoticed by the lawmakers in Washington, as some on Capitol Hill have noticed that the banks are returning to their previous spending habits. Representative Barney Frank (D-Mass) stated that this revelation "strengthens our commitment to getting legislation passed." A vote is scheduled for Tuesday in order to increase oversight of pay on the Street.
The pay rates were acknowledged by President Obama last night when he said he'd like to "think that people would feel a little remorse and feel embarrassed and would not get million-dollar or multimillion-dollar bonuses." I'm guessing that this just isn't the case.
An example of this outrageous spending is provided by Goldman Sachs (NYSE: GS), which set aside $6.6 billion (!) for compensation in the recent quarter. This set-aside brings the total for the first half of the year to $11.4 billion for GS. The article computes this out over the entire year, and notes that GS employees will earn an average of roughly $773,000, which doubles last year's pay.
Of course, the banks argue that they have to pay "competitively" in order to retain top employees. But it's these top employees that got us into this mess, so let's make sure to pay them a ridiculous amount of money to ensure that they can make these mistakes again.
I am all for fair compensation, but at some point in time, enough is enough. I'm not sure that this rate of pay is commensurate to the executives' recent performance. Do you?
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Reader Comments (Page 1 of 1)
7-23-2009 @ 10:51AM
AROB said...
This is absurd. The execs have a great system. They make bad investments and a company has major losses in '08 they keep "bonuses".(I thought bonuses were for profits anyway).They have some profit this year they lose bonuses but keep "set asides" for compensation. This is heads We win Wall Street and tails you lose the investor and the taxpayer. It's obvious whose side Washington is on. If our leaders in Washington don't stop listening to lobbyists from "Wall Street" instead of constituents from "main street" then there will be blood in THE STREETS!
7-23-2009 @ 11:27AM
BHarrison said...
Our capitalistic system that built the wealth and prosperity of our nation is been perverted by the financial institutions and our government (sic. Congressmen) to allow the financial instituions to pillage our national economy via the orchestration and perpetuations of massive frauds and pyramid schemes during the last decade or more. The vast majority of these financial crimes would have been totally avoided and/or prevented if Congress had exercises reasonable and prudent regulation and oversight of the financial insdustry; but the vast majority of Congressmen chose to serve the corrupt interests of the financial institutions and the ultrawealthy individuals.
It is totally unconscionable that these corporate "participants" and our corrupt Congressmen be allowed to continue in their postions to continue this corruption. The American people must rise up politically to demand the removal of those corporate management and Congressmen who orchestrated, or allowed the orchestration of these frauds.
The propaganda that the bailout efforts were to save peoples' mortages from foreclosure has been revealed to be the scam that it is. Originally, only 1% of the mortgages nationally were being projected to be in danger of foreclosure actions; now the value of those mortgages is barely a fraction of the bailout monies that have been appropriated; and yet the foreclosure rates are escalating.
All of the government's actions have been a propaganda scam to save the wealthy financial institutions from the losses arising from the frauds and pyramid schemes that they orchestrated and which caused the economic collapse of our national economy.
Why haven't these corporate CEOs and upper managment personnel been indicted for the crimes that they committed. Why should the other employees, who benefitted richly from the frauds and pyramid schemes, be given pay raises and/or bonuses while the American people are suffering from the financial fall out from these crimes . . . this is tantamount to "rewarding the theives and crooks".
Wake up America, it is time to throw the Crooked Congressmenout of office and to demand the indictment of corrupt corporate personnel; and an accounting and prosecution for the financial crimes that caused this financial crisis.
Every American should contact their Congressmen . . . hell no, we aren't going to take this lying down.
7-27-2009 @ 10:10AM
Kevin Simpson said...
It's such a bad thing to see that these people are earning so much money in a time that people suffer with the crisis. I agree that is enough. It's time to review what is going on and find an alternative solution for this. I know that those who have these compensations can be mad, but it's very unfair...