Wall Street Pigs at the Trough
In late December, ex-CEO John Thain snuck in $15 billion worth of Merrill Lynch bonus payments to executives and employees a month earlier than usual. He did this while his merger partner to-be Bank of America was in Washington telling officials that a $20 billion rescue package was essential for survival.
The fact that anyone at Merrill Lynch, a firm that lost roughly $65 billion of it’s own and it’s shareholder’s money since 2008, even utters the word bonus is, in and of itself, appalling. Are you complete sociopaths or do you simply not know what the word bonus even means?
Noun
bonus (plural bonuses)
Here’s the deal, vampires, bonus is from the Latin, meaning good. What good have you done lately that you believe you are deserving of any kind of bonus? Are you kidding? Are we all just being “Punk’d“? Is Ashton Kutcher about to pop out of The Federal Reserve building with a camera crew?
And before someone tries to argue that the bonus is a part of people’s pay that they rely on, I’ll just say too bad. All of these bonuses over the past 5 years were paid based on the obscene leverage being used to artificially inflate profits at the Wall Street circus anyway. The vast sums paid to executives and employees from all that leverage was undeserved then, so I sure hope they saved some of it for now.
While the swines drove up the price of everything from martinis to Manhattan apartments , no one stopped to ask how everyone else felt about it. Well, the rest of us don’t really care about what perks and bonuses they were relying on.
As one of my clients, far-removed from The Street, remarked to me just yesterday:
“We all went along with the program and did what the government told us. We put our money in 401k’s, even factory workers did. Many of these people can never work long enough to replace what’s been lost over the last year.”
I read recently that over $2 trillion in 401k retirement savings has disappeared this year. The fact that TARP money isn’t being used to work it’s way into the economy for the benefit of regular Americans who’ve been decimated is a disgrace. To learn that it’s being distributed to the very bankers and traders that got us into this mess as a bonus? Well, now we may be talking about the biggest crime ever committed, making Bernie Madoff look like a two-bit pool hustler.
Wall Street is and has always been filled with some of the hardest working and smartest people the world has to offer, so it’s unfortunate that for some, there was never enough money and the concept of risk aversion was tossed by the wayside. The few ruined the market and the economy for the many.
So take your bonus, pig. But know that the best revenge for a Type-A personality like yourself is coming soon: The realization that you have peaked. You will never be able to make that much money, with that little responsibility, ever again.
See Also:
I wish the revenge was a little more severe.
Like, if John Thain’s head got knocked off by a meat- cleaving-carrying member of the proletariat or something, that would be good.
-DT
I wish the revenge was a little more severe.
Like, if John Thain’s head got knocked off by a meat- cleaving-carrying member of the proletariat or something, that would be good.
-DT
I wish the revenge was a little more severe.
Like, if John Thain’s head got knocked off by a meat- cleaving-carrying member of the proletariat or something, that would be good.
-DT
No, YOU clearly don’t know what the word bonus means. If you were to look up capitalism in Webster’s dictionary, would that give you an accurate understanding of how our market works? Maybe looking in the dictionary isn’t the best way to understand finance…
Not at the senior level, but at the junior level at these banks, bonuses are not what the rest of the world thinks they are. They are (essentially) not performance based. And they are definitely not extra. When you sign up for a investment banking job at Goldman, you get a salary of 60k. And you work 100-120 hours/week. The rest of the world thinks we’re kidding about these hours, but we’re not. If you break 60k into an average workweek of 110 hrs, you get $10.50/hour (pretax).
But, there’s the “bonus”. The bonus isn’t “extra”. It’s PART of the salary. It’s just part of the salary with different legal implications. If you have 50% of your compensation in bonus, then if you quit one day before the end of the year, they only have to pay you 60k, not 120k. See how this works? Bonuses are compensation that the bank can withhold if you quit early (which many people do, cf. 120 hr work weeks). Guess who this is REALLY meant to benefit? SHAREHOLDERS! By not paying the people who quit (and this is only works under this “bonus” structure), the company saves money and there’s more money for shareholders.
But here lies the rub: when people like you who don’t know what they’re talking about hear the word “bonus” they scratch their head and crack open the dictionary and come to the conclusion that they’ve spotted an SEC violation. And on your soapbox you tell the world that the evil bankers are getting paid extra while the taxpayers suffer. And when enough of you say it, the government notices and then they ban bonuses. And then do you know what happens? Either there is reduced demand for bankers because the pay is lower (i.e. intelligent people work elsewhere, dumber people work at the banks – I bet you didn’t think this is possible but it is, and imagine the crises that we’ll face if we have even dumber people holding these jobs) OR the salaries will just increase to cover what the bonuses once were. So instead of 60k salary and 60k bonus, you’ll have 120k salary. And the people who ultimately get hurt from this are the shareholders, and in this case the taxpayers.
Again, I’m not talking about people at the senior level (and to save you the trouble of searching through Webster’s, when I say senior people I mean John Thain), I’m talking about people at the junior level.
Keep up the good work!
No, YOU clearly don’t know what the word bonus means. If you were to look up capitalism in Webster’s dictionary, would that give you an accurate understanding of how our market works? Maybe looking in the dictionary isn’t the best way to understand finance…
Not at the senior level, but at the junior level at these banks, bonuses are not what the rest of the world thinks they are. They are (essentially) not performance based. And they are definitely not extra. When you sign up for a investment banking job at Goldman, you get a salary of 60k. And you work 100-120 hours/week. The rest of the world thinks we’re kidding about these hours, but we’re not. If you break 60k into an average workweek of 110 hrs, you get $10.50/hour (pretax).
But, there’s the “bonus”. The bonus isn’t “extra”. It’s PART of the salary. It’s just part of the salary with different legal implications. If you have 50% of your compensation in bonus, then if you quit one day before the end of the year, they only have to pay you 60k, not 120k. See how this works? Bonuses are compensation that the bank can withhold if you quit early (which many people do, cf. 120 hr work weeks). Guess who this is REALLY meant to benefit? SHAREHOLDERS! By not paying the people who quit (and this is only works under this “bonus” structure), the company saves money and there’s more money for shareholders.
But here lies the rub: when people like you who don’t know what they’re talking about hear the word “bonus” they scratch their head and crack open the dictionary and come to the conclusion that they’ve spotted an SEC violation. And on your soapbox you tell the world that the evil bankers are getting paid extra while the taxpayers suffer. And when enough of you say it, the government notices and then they ban bonuses. And then do you know what happens? Either there is reduced demand for bankers because the pay is lower (i.e. intelligent people work elsewhere, dumber people work at the banks – I bet you didn’t think this is possible but it is, and imagine the crises that we’ll face if we have even dumber people holding these jobs) OR the salaries will just increase to cover what the bonuses once were. So instead of 60k salary and 60k bonus, you’ll have 120k salary. And the people who ultimately get hurt from this are the shareholders, and in this case the taxpayers.
Again, I’m not talking about people at the senior level (and to save you the trouble of searching through Webster’s, when I say senior people I mean John Thain), I’m talking about people at the junior level.
Keep up the good work!
No, YOU clearly don’t know what the word bonus means. If you were to look up capitalism in Webster’s dictionary, would that give you an accurate understanding of how our market works? Maybe looking in the dictionary isn’t the best way to understand finance…
Not at the senior level, but at the junior level at these banks, bonuses are not what the rest of the world thinks they are. They are (essentially) not performance based. And they are definitely not extra. When you sign up for a investment banking job at Goldman, you get a salary of 60k. And you work 100-120 hours/week. The rest of the world thinks we’re kidding about these hours, but we’re not. If you break 60k into an average workweek of 110 hrs, you get $10.50/hour (pretax).
But, there’s the “bonus”. The bonus isn’t “extra”. It’s PART of the salary. It’s just part of the salary with different legal implications. If you have 50% of your compensation in bonus, then if you quit one day before the end of the year, they only have to pay you 60k, not 120k. See how this works? Bonuses are compensation that the bank can withhold if you quit early (which many people do, cf. 120 hr work weeks). Guess who this is REALLY meant to benefit? SHAREHOLDERS! By not paying the people who quit (and this is only works under this “bonus” structure), the company saves money and there’s more money for shareholders.
But here lies the rub: when people like you who don’t know what they’re talking about hear the word “bonus” they scratch their head and crack open the dictionary and come to the conclusion that they’ve spotted an SEC violation. And on your soapbox you tell the world that the evil bankers are getting paid extra while the taxpayers suffer. And when enough of you say it, the government notices and then they ban bonuses. And then do you know what happens? Either there is reduced demand for bankers because the pay is lower (i.e. intelligent people work elsewhere, dumber people work at the banks – I bet you didn’t think this is possible but it is, and imagine the crises that we’ll face if we have even dumber people holding these jobs) OR the salaries will just increase to cover what the bonuses once were. So instead of 60k salary and 60k bonus, you’ll have 120k salary. And the people who ultimately get hurt from this are the shareholders, and in this case the taxpayers.
Again, I’m not talking about people at the senior level (and to save you the trouble of searching through Webster’s, when I say senior people I mean John Thain), I’m talking about people at the junior level.
Keep up the good work!
I do admire their brass necks though…..is praying for Karma a waste of time ?
I do admire their brass necks though…..is praying for Karma a waste of time ?
I do admire their brass necks though…..is praying for Karma a waste of time ?
Joshua:
For what it’s worth, your comments are right on the mark and, as usual, devastating. I’m a former Series 7/63 and have spent nearly three decades on Wall Street as a regulator, at wirehouse, and in the private practice of law. There is no question that our industry is filled with Bulls, Bears, and Pigs to be slaughtered; and you just highlighted one such porker. You got this story right!
For another side of Wall Street’s stupidity, see this recent article about FINRA’s secretive process for selecting a new CEO:
http://www.brokeandbroker.com/index.php?a=blog&id=115
Joshua:
For what it’s worth, your comments are right on the mark and, as usual, devastating. I’m a former Series 7/63 and have spent nearly three decades on Wall Street as a regulator, at wirehouse, and in the private practice of law. There is no question that our industry is filled with Bulls, Bears, and Pigs to be slaughtered; and you just highlighted one such porker. You got this story right!
For another side of Wall Street’s stupidity, see this recent article about FINRA’s secretive process for selecting a new CEO:
http://www.brokeandbroker.com/index.php?a=blog&id=115
Joshua:
For what it’s worth, your comments are right on the mark and, as usual, devastating. I’m a former Series 7/63 and have spent nearly three decades on Wall Street as a regulator, at wirehouse, and in the private practice of law. There is no question that our industry is filled with Bulls, Bears, and Pigs to be slaughtered; and you just highlighted one such porker. You got this story right!
For another side of Wall Street’s stupidity, see this recent article about FINRA’s secretive process for selecting a new CEO:
http://www.brokeandbroker.com/index.php?a=blog&id=115
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