Wall Street's Top Executives Face 70% Bonus Cuts, Study Says

[Adsos Letter]

Source: Bloomberg

Nov. 6 (Bloomberg) -- The most senior executives at Wall Street firms will have their bonuses slashed by as much as 70 percent, more than other employees, amid falling revenue and political pressure, according to a report by Johnson Associates.

The executives whose pay is disclosed in public filings will have the steepest reductions, while bonuses for other workers will drop by between 10 percent and 45 percent this year. Rewards are likely to decline even more in 2009 as business slows further, said Alan Johnson, managing director of Johnson Associates, a compensation consulting firm.

A $700 billion government bailout of the financial industry has led to calls from politicians including New York Attorney General Andrew Cuomo and Rep. Henry Waxman, a California Democrat, for companies such as Goldman Sachs Group Inc. and Morgan Stanley to justify year-end rewards. That's likely to reduce pay for senior executives whose compensation is disclosed in proxy filings by more than for other workers, Johnson said.

``The pressure from the politicians is intense,'' said Johnson, whose firm is based in New York. ``You're going to be treated worse if you're in the proxy.''

Read more: http://www.bloomberg.com/apps/news?pid=20601087&refer=worldwide&sid=a2Z_7EZpJryA

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Go Waxman and Cuomo...give 'em the cold steel!

[aquart]

1. So they only get 30% of the $17 million? How much would that be?

[NeoConsSuck]

4. 17 million?

these guys don't work for those peanuts:

Goldman, which converted in September into the fourth- biggest bank holding company from the largest U.S. securities firm, said in its proxy filing this year that Chief Executive Officer Lloyd Blankfein received a 2007 bonus of $67.9 million and that Co-Presidents Jon Winkelried and Gary Cohn each received $66.9 million. Last month, Goldman received $10 billion as part of the government's $700 billion bailout.

[comtec]

7. about $5.8 MILLION....

we need to have a good ol fashioned lynching... like the French did!!!

[exboyfil]

9. Compensation Committees

I do not understand why the hearings Congress did with some of the executives of the failed banks did not call the Compensation Committee board members for some of these banks.

What happens with Executive compensation is a lot like what happens in professional sports. Your CEO is always the best so you always shoot to put him/her in the top 25%. Reading the compensation filings is always interesting. I cannot believe how many different ways a CEO is compensated. A compensation committee will tell you that certain packages are required to attract and retain certain talent. I got to think, for many of the CEOs, there feelings of worth about themselves are tied to the compensation (ie I am better than these other CEOs - I got listed ahead of him/her in Forbes). You see the same thing in sports and entertainment.

I would like to see compensation committees begin to benchmark comparable European and Japanese executives. I would also like to see large mutual fund companies take a more active role in company management and compensation. Also I would like to see options treated as income when they are awarded (perhaps set up a trading pool for comparable options that can be traded on an open exchange - the price paid on the exchange is the CEOs compensation for the same number of options). I would like to see exercising of options be delayed until possibly up to 2 years after a CEO leaves a company.

After the fact adjustments to compensation are always an issue. If the board made a bad deal at first, then it is hard to change that later and keep any integrity in the compensation process. For example would folks be in favor of fiat changes to sports stars salaries if they did not perform to expectations or an actors movie failed to perform at the box office. Another example would be changing union contracts after they are made.

Where do the arguments about pegging executive compensation to the average or lowest employee's salary end? Do you apply such arguments to sports and entertainment stars as well? Why not a board establishing all salaries. Since the lowest and average worker's salary will not be a whole lot different for a $1M or $10B revenue company, is it reasonable to expect that the CEOs of the two companies make the same salary.

In terms of compensation for the executives of the bailed out banks, I was in favor of a plan that would have zeroed out the equity position in banks and made the bond/debt holders the new equity owners of the banks. In that case (ie bankruptcy) the executives would have gotten nothing in golden parachute compensation since their contract was no more important than any other contract in bankruptcy court.

[mbperrin]

18. Any business which needs a public dole to survive needs to have a

CEO working for $1 a year until all public monies are repaid with some statutory interest included. Then, when they're back on the COMPANY dime, they can do as they wish.

Union contracts? Hell, union-busting is as American as apple pie. Check out air traffic controllers with Saint Ronnie right up to pension plans being discontinued for union workers retired for years.

In short, while they're spending OUR money, they need to use it for the company's benefit, not the execs. I was against a thin dime of any kind of bailout at all, and I knew I was right. But it's done now, so they need to live with the most elementary of rules - OUR house, OUR rules...

[lob1]

2. Why are they getting any bonuses at all?

They're not like waiters working for tips.

[primavera]

11. Especially since they're overseeing bankrupt companies living off the public dole

Giving themselves any bonuses for their performance seems pretty seriously inappropriate.

[superconnected]

3. Quick, CALL BUSH!!! Clearly a national emergency that deserves a bail out.

Help those poor crooks!

[JohnnyRingo]

5. Oh My!... Do they have food stamps with a picture of that monopoly guy on them?

There must be some way we can help.

[dixiegrrrrl]

13. Meanwhile, one of our local grocery stores has stopped taking

food stamps and WIC coupons.
Saw the sign today when I went shopping.

[fasttense]

6. Since I am experiencing a 100% job loss

I think it is only fair they experience the same.

[customerserviceguy]

22. Not only that

but claw back the property purchased with the exhorbitant bonuses paid in the last few years, when they were cooking the books to hide all this.

Really, folks, they tried to keep this a secret, if they had just succeeded for two more months, they would have gotten away with it.

[natrat]

8. how about drawn and quartered and dragged through lower manhattan

[RUMMYisFROSTED]

10. According to the article it should be drawn and thirded.

[Doctor_J]

12. Maybe this will cut their income past $250,000 so their taxes won't go up

:shrug:

[fascisthunter]

14. About Fucking Time!

[Stellabella]

15. Bonus CUTS? They shouldn't get bonuses AT ALL!

Sheesh.

[Skittles]

16. oh where did I put that damn thing?

oh here it is :nopity:

[Adsos Letter]

17. Rather than play that tiny violin, Skittles...

...wouldn't you rather stand outside their offices and kick their collective asses as they emerge...? :D

[Skittles]

21. I guess I should have said where my BIG violin stick would end up

yes INDEED :D

[Omnibus]

19. Awwww....Poor babies.

:nopity:

[barbtries]

20. ah, poor guys

so now they'll only get, what, 200 or 500 times as much as i'll make in a year? only a few million instead of several million? they'll really have to tighten their belts with this blow. :sarcasm: as if it was necessary

[DS1]

23. What's the definition everyone here grew with of 'bonus'?

[No Elephants]

24. Bonus??? For what? They should be getting a salary cut, not a bonus.

[iceman66]

25. Cry me a river

Given their 'performance' this past year, they should be prosecuted, not given bonuses.

[GetTheRightVote]

26. I agree with those who are stating that they should not get any bonus this year

Come on' Their companies are bankrupted, etc while the average workers are losing their jobs or taking cuts in pay. They make me sick just simply sick.

:kick:

[Adsos Letter]

27. I agree also.. I was more heartened by the fact that Waxman is getting involved...

...and hoping that this means the "bailout" will get some competent scrutiny.

I never meant to insinuate that I thought these guys should get anything, but it seems that people have taken it that way... :hi:

[Joe Bacon]

28. Only 70%

SCREW THEM, Not ONE PENNY for a bonus for ANY of those assholes!

[Dem2theMax]

29. How will I sleep tonight, worrying about how these poor people will pay their bills?

I'll sleep like a baby. :evilgrin:

[foxfeet]

30. Bonus? Bone this. They should get nothing.

[LeftishBrit]

31. Well, I don't think they should be getting bonuses at all; but that's a step in the right direction

I suppose.

Honestly, anyone else who fucked things up as much as they have done would be facing the sack.

[appleannie1]

32. They should not get bonus money.