Monday, October 20, 2008

Fun with your money

Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government's cash has been poured in on the condition that excessive executive pay would be curbed.
None of the banks the Guardian contacted wished to comment on the record about their pay plans. But behind the scenes, one source said: "For a normal person the salaries are very high and the bonuses seem even higher. But in this world you get a top bonus for top performance, a medium bonus for mediocre performance and a much smaller bonus if you don't do so well."

Many critics of investment banks have questioned why firms continue to siphon off billions of dollars of bank earnings into bonus pools rather than using the funds to shore up the capital position of the crisis-stricken institutions. One source said: "That's a fair question - and it may well be that by the end of the year the banks start review the situation."
Photo Credit: Matt Stoller


  1. Correct me if I'm wrong, but isn't curbed pay precisely the bone we were thrown in exchange for the bailout's passage?

    So... they're just liars?

  2. Liars or idiots I guess, since Paulson said the day before the bill passed that none of these provisions could be enforced.

    It's kind of along the lines of the labor/environmental protections in the most recent trade deals. They have no real value, but it gives people cover when the vote for them.