Did you get your turkey this year?
According to a report in today's New York Times, Wall St. bonuses will drop by 44 percent in 2008, to $18.4 billion from 32.9 billion. The average bonus was $112,000.
Now I realize that bonuses for traders and investment bankers make up a significant percentage of total compensation, so it's not the same as your pointy-haired Scrooge holding back on the frozen Christmas turkey. And living in the city (or Rye, or Hastings-on-Hudson, or Greenwich) sure ain't cheap. I know, I tried it. The city life, not the bonuses.
But something really bugs me about this.
The declines reflect the souring of the global economy and credit markets, as well as the disappearance of the traditional Wall Street investment banking model.
What were the five largest Wall Street banks no longer exist in the form they began 2008.
I know it's not fair to tar the entire industry with the same brush. A lot of people getting their bonuses shrunk were ordinary desk jockeys with dogs and families and expensive monthly commuter passes on Metro-North. But I've got to say it.
Through sheer greed, overwhelming hubris and what is now known as "irrational exhuberance," these folks managed to bring most of the entire world financial system to its knees. And at least in some cases, we're paying their bonuses.
I'm lucky enough to have a short-term incentive included in my compensation. It's determined by a combination of individual performance and corporate performance. Even though I had a good review and we made a sizable profit, my bonus was cut by 30 percent this year because the company didn't meet its ROI and earnings targets.
Believe me, I'm not complaining. But something just stinks about this.
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I do not trust figures from WSJ. But I do believe Meanie that there is a real fear in management.
And it is a justifiable fear.
We cannot as a nation, give the top one percent half of our goodies. NO MORE.
Thanks, I had to get that off my chest.
January 29, 2009 1:17 AM | Reply | Permalink
That stink is the smell of jobs rotting on the vine, and the odour of undeserved bonuses being carried out the door by the cads who pulled them down before anybody in power chose to get wise. Rec'd.
January 29, 2009 3:57 AM | Reply | Permalink
Some additional detail, by way of Ben Rosen from this morning's coverage:
Merrill Lynch is paying $4-5 billion in bonuses itself, despite monstrous losses that have forced the firm back to Washington for more bailout money.
Looks like that little chunk of change is coming right out of our pockets. Enjoy.
January 29, 2009 7:24 AM | Reply | Permalink
We just have to scare them a little more. A LOT MORE.
January 29, 2009 7:26 AM | Reply | Permalink