Wall Street Bonuses; Do U Agree?

[Jon8503]

Just curious your take on Wall Street handing out over 24 billion in bonuses this year which includes the CEO of Goldman Sachs getting over 53 million himself after being in the job for around 6 months. They say, his pay breaks down to over 148,000 per day.

Actually, that is their right to pay and give whatever they want or the board members but we know how that goes. Look at Enron and all the other companies & how their board members let them do whatever.

However, Wall Street has and is going on and on about what a wonderful economy this is and yes they have made money but not with Joe America, the average worker and with this administration, Joe America has not done that great.

The bonuses are totally obscene with these republican supporters, promoters of a war none of them would be willing to fight themselves. They are living in a world with their own economy and are totally out of touch with the other economy and people in that economy.

It may be legal, but obscene and will probably help any of those that say there is a coming need for income redistribution. CEO's salaries are 100xs the lowest worker now and 100xs any other country's CEO salaries. Their justification is the old trickle down theory, the waiters and service workers really benefit from these bonus as they spend it. Charities really like it because they give so much of it to various charities.

See, we should all be grateful for these huge bonuses being given out & which will trickle down to us all or as they said on MSNBC, the little people.

Just my take, curious about you others.

[Turbineguy]

1. Yes, I do.

I mean what would some crank like me do with a yacht?:sarcasm:

[Norquist Nemesis]

2. Let's just say that the lowest of those bonuses

is around 18 years of my family income and leave it at that.

[no_hypocrisy]

3. I have a negative bent on the bonus phenomenon.

With a questionably secure economy that could sink were there a panic initiated worldwide, I can't believe the bonuses will be there next Xmas. Soooooo, the banks and corps are giving out the money before it's depleted. I think I'm right as the amounts are inexcusably excessive.

[Torgo Johnson]

4. I agree but,

I don't think there is anything the government can legally do about it. A boycott
would not really work either, as you would pretty much have to boycott everything to
even affect Goldman Sachs.

[Selatius]

5. The best way to deal with it is to tax them.

You've got people like Warren Buffett saying the percentage of his income taken away by taxes is lower than the percentage taken away from his office workers. That's sick, and he thinks that's wrong, too. A tax code that taxes poorer people more heavily than rich people is inherently unjust.

[Lucky Luciano]

18. Sure tax them and it will get looted by HAL, the rest of the * cabal,

big pharma, and the military industrial complex....sounds like a great idea :eyes:.

I am not opposed to a fair taxing system, but I will be damned if it is going to go to one of the aforementioned groups. If the money will be spent correctly and ethically, then let's talk.

[LSK]

32. huh??? what are you talking about????

There are 2 wrongs going on right now

1 Out of control Defense spending

2 Unfair tax system

So you dont want to fix 2 until 1 is done???? It all adds up, so if EITHER gets fixed, its a plus.

[Lucky Luciano]

33. Definitely fix number one first

Raising taxes only to hand it over to the war machine? Fuck that. I would rather have a money burning party.

[LSK]

35. how about do both so we are not in a deeper whole than we are already in

Or do you not care that they have to borrow from China, Japan, Social Security, Medicare, etc etc etc.

Its going to the war machine right now whether we borrow it or pay for it now. Id rather pay for it now and have less of a problem later on.

[Lucky Luciano]

39. Doing both is fine.

I really don't want more money going to the war machine - if they can always borrow without someone slapping them, they will continue to do so. Cut them off. I want no part of this anymore. I am done with it.

If I could make all my tax dollars go to helping Americans in need, I would do that in a second. I would also not complain if there was a raise in my taxes if the money would be used to help people without healthcare and pay off our debt for two examples. A bit idealistic I know, but I am an intense person and I always aim for the best solutions.

Trouble is....anyone who ran for office and won with that sort of platform would be assassinated.

[Selatius]

36. Well, I am operating under the assumpiton that the war is over.

What would justify your snide remark like that? There is no need to get hostile.

[Lucky Luciano]

38. My apologies...not intended to be snide, but I hope

you understand the sentiment.

The anger in my comment was not directed at you...it is directed at *, but I can understand why you took offense. One of these days I am going to calculate how many people I have killed in Iraq and the United States in the following manner. I will take the tax dollars I have given to the US Government and multiply them by the percentage used for the war - including the R&D used specifically for this war. Then I am going to divide that number - call it X - by the total amount spent in the war. Then I will multiply that fraction by the number of people killed because of our actions in Iraq - both direct and indirect. That will be how many people I have killed in Iraq - I will also come up with a figure that says how many tax dollars you had to pay in total to the government in order to kill one Iraqi. I hope it will make a point. How many Americans did I kill? Well take all that money that was wasted to kill Iraqis and see how many people died, but could have been saved by providing them healthcare. I hope that will make people think.

Again, sorry if I offended you.

[SheilaT]

21. I'm pretty sure that

bonuses are taxed at ordinary income rates. Although bonuses not paid out in cash may not be taxed the same way -- stock options, for instance.

At least the bonus my spousal unit gets every year -- and trust me, it's not a multi-million dollar amount -- is taxed.

[gWbush is Mabus]

6. I'm fine with it.

That's the beauty of America is you put yourself through school and you can work for an investment bank if the personal sacrifice is worth the long-term payoff.

At the same time, I am for a very progressive personal income tax structure.

[Ezlivin]

7. I play the lottery to get a shot at the equivalent of one guy's bonus

But these guys and other CEOs win the equivalent of a big lottery every single year.

Like a previous poster said, one bonus like that and my family would be taken care of for decades.

[aquart]

8. Those bonuses are a marvelous incentive to criminal activity.

I spent three years on a financial crimes grand jury and the most fun we had was making the bastards tell us how much their bonuses were. (Grand jurors are allowed to ask questions. It can be downright entertaining. Since we weren't allowed to hang them.)

[still_one]

9. No I don't. It represent the ultimate of greed

The United Health Care CEO receiving 1.7 billion in options is just another example.

What they are doing is looting the companies they work for

It is not much different than what the government is doing. In 2008 they are going to allow conversions of your IRA/401K to a Roth without the income limit that currently exists. Are they doing this to help the little guy? I think not, they are doing this, so they can convert their IRAs to a Roth, and shelter subsequent earnings from taxes

This is the era of greed, and the pigs are at the trough. Eventually, someone will have to pay for these excesses, but I will guarentee it won't be them

[valerief]

16. You got that right! nt

[flobee1]

10. CEO's -no way

At a certain point they make so much that they begin to drain money from those that need it

Those that actually trade on the floor of the NYSE- yes
that is unbelieveably hard work, and I dont envy that job at all

[Lucky Luciano]

20. You don't know what trading is....

Blankfein was a head trader - the NYSE floor guys just execute trades. The people who put on big positions with significant studies and risk understanding are the big earners - Blankfein was one of them. He is a trader through and through.

[Jim__]

11. It's obscene. But, it's a very public obscenity.

Is there anyone who thinks this guy with a $53 million bonus has actually contributed that much more to the GDP than the guy making, say $40,000 a year? It is a clear indication that working people are being ripped off.

[pdrichards114]

12. I agree with the poster above, it is obscene

It represents all the worst quality's of humanity. It makes me ill.

[Sammy Pepys]

13. I think bonuses of those amounts are ridiculously high....

...but I can't really find the time to get too bent out of shape about it. If my employer gave me a bonus like that, I'd take it in a heartbeat :evilgrin:

[TahitiNut]

14. Such obscenely inequitable 'compensation' is a symptom of a profoundly BROKEN economic system.

The presumption inherent in any proposal to prohibit such payola is that it's some kind of isolated rather than systemic event. That, I believe, is deluded. When 'supply-siders' promulgate policies which offer incentives (rewards) to those who have the greatest wealth and the least direct contribution to the productivity of a society, we are (quite literally) rewarding predation.

Let me try to make one thing clear. The greatest wealth (those holding about 20% of the total aggregate wealth of this nation) is not accumulated by the labors of the wealthy themselves; it's gained by profiting on the labors of others. We're "rewarding" the wrong people - the wrong activity. That wealth itself is a 'reward' for exploiting others and enacting policies that increase the benefits of exploitation merely compound exploitation ... all at the expense of those whose activities are the result of the very thing we say we're encouraging: productivity. How can productivity be served by increasing the burdens on those who're productive? It's insane.

What's particularly insane is a $53 million bonus for someone who's a middleman (broker) for the exchange of the entitlements of wealth: ownership. This guy is even another layer removed from the very activity we claim we're supporting: production. It's like paying honoraria to organized crime for the amount they're able to steal.

[ProfessorGAC]

15. I Don't Because The Impact These People Have. . .

. . .over the value of their company and the economic value to society is far too small to be given that much financial credit.

The market boomlet that is occurring is totally independent of a single action taken by these people. It is a function of speculation and the falling dollar which affects the TVM of bond investments and capital markets. So, the money flows toward the market and these investment banks and investment houses are benfitting, as are the big clients, from a phenomenon over which they exert zero control.

Capital enterprises are not operated on luck. Sure, luck always has some play, but rewarding people for being lucky to this degree seems inappropriate and a frivolous use of owner equity.
The Professor

[TahitiNut]

24. "a phenomenon over which they exert zero control."

Even more disturbing to me is the degree to which such obscene rewards actually encourage these people to attempt to exert such control over the underlying activity .. a 'control' (or influence) that would necessarily be completely at odds with the fundamentals of productivity and innovation.

It's a form of 'payola,' imho.

[ProfessorGAC]

30. A Good Adjunct, Nut

I agree. And, worse yet, adding the two together, is that they will try to exert control over something they really can't, which can ONLY result in damage. They can make things worse by trying to turn too many "knobs" but they can't actually makes things better. Kobuyashi Maru!
The Professor

[Lucky Luciano]

17. It is fair

First You address the fact that Blankfein has only been CEO for 6 months - well, where do you think he was before that? He was one of the heads of trading - his bonus would have been the same if he was not advanced to CEO - the star traders make as much as, and usually more than the CEOs.

Don't confuse the Wall St guys with the companies that get traded. Enron is not Goldman Sachs. WMT, HAL are not Goldman. Big Pharma is not Goldman.

Many of the people that work in I-Banks are not thugs - I reply to these threads because I hate getting a bad rap and I want to correct things. I have not met one - seriously not one person who said anything good about *. I once walked past a trader that had a picture of * on his desk and made me want to vomit - the guy next to him had a picture of Kerry to counter him. I avoid politics and never discuss it at work as it is bad for business.

Actually, our sales coverage at JP Morgan took us out for dinner and drinks...topics included the Daily Show and how important it is to America that such shows exist. We discussed how Iraq is such a mess and * is such a fuck up. One of the sales guys had his best friend from college with him (a little odd, but hey, I was not going to complain about a guy wanting to see a friend who probably esacped death one too many times). The guy is a captain in the army in the most dangerous parts of Iraq. He discussed how bad it really is and what a quagmire it is. Such a waste of good brain power to have him in Iraq. The guy was very nice, articulate, and progressive. This is the only time we got political so openly with others in the field and we all agreed that things are bad and need to be changed in a major way. My boss agreed too - my boss is actually an apolitical fundy, which is odd, but after telling him about the way politics is, he firmly anti-*. He talks and sounds like a Jimmy Carter type of religious guy. He never discusses religion unless asked, he wants the min wage increase (he makes $3M a year), and believes in helping the poor instead of wasting money on Iraq.

Corzine and Rubin made tons of money at Goldman - they are certainly not part of this evil cabal in Washington.

Also, unlike Enron, WorldCom, etc, the investment banks are actually making HUGE money for the shareholders. Goldman made an astronomical $9.5B in profit this year - and that is after paying out $16.5B to its employees. All of them receive a nice bonus - and I mean ALL of them. Sure, some will bitch about getting $2M when they earned $30M for the bank (People usually want 10% of their PnL if they are traders), but that is the way it goes sometimes. The middle and back office support people get paid very well too. The only people to get less than six figures are the first year kids fresh out of college, the receptionists, janitors, mailroom guys, and anyone who lost money. Even they probably got paid well though considering their position. You cannot compare this to CEOs that take millions in bonus while their stock is in the shitter. They are kicking ass and most of the money is actually not made by cheating - there is no need to.

I am rambling obviously, but I just wanted to clear some things up - you might have more friends in this industry than you think. George Soros is another of course and he made more than 20 times what Blankfein earned in a year in several different years.

[Jon8503]

25. Thanks for the information, I looked up donors from Goldman and

it appears a lot of the employees do have a democratic tilt.

I think this is a good discussion because the amount of money is unbelieveable and is hard for me at least and I believe for most to comprehend and really does seem obscene with all the other stuff going on in the world.

Anyway, appreciate your taking the time to post the info from your side that you did. I always like to get the entire take not just my own understanding and viewpoint but all sides of a situation. You know, the "fair & balanced thing".

It is still hard for me to agree or understand one person getting that much money in one bonus.

Glad you came over here from the other place.

[Lucky Luciano]

27. Your welcome...always glad to talk about this...

I hate unfairness as much as the next guy. I do want Americans to get healthcare...I do want all to be educated. I do want to fix affirmative action. In its current incantation, it is deeply flawed. It should not be race based - it should be income based. There are plenty of people in Appalachia who could use the help as well.

I am ok with more progressive and fair taxes, but ONLY WITH THE CAVEAT that the money be spent properly.

[moondust]

19. Are they connected to outsourcing?

Goldman's profits are tied to the stock market which seems to rising largely as a result of massive outsourcing in many sectors. So how much of that 24 billion in bonuses is effectively a reward for costing thousands of Americans their good-paying jobs?

[Lucky Luciano]

23. Goldman made most of its money on

Fixed Income Trading, Commoditiy trading, and M&A...the stock market boomlet (like that phrase used above) played a role, but a very small one.

[moondust]

29. Thanks.

I wonder about other brokers, though.

[Lucky Luciano]

34. It is pretty universal. Fixed Income, Commodities, M&A are

the underlying theme this year. M&A can be a justification for complaints of course as consolidation can be bad for employees and consumers. There is business that gets done with companies doing the outsourcing, but I don't know as much about the I-Banking side of the biz. I am much more familiar with the trading side.

[Jon8503]

22. Goldman Sachs CEO Paulson Major Republican Donor

May 30, 2006 | In nominating Goldman Sachs CEO Hank Paulson to be the next Secretary of the Treasury, President Bush tapped a major Republican donor who has been more generous to the party than outgoing secretary John Snow. While Paulson has a long record of giving to Republicans, his wife and his employees at Goldman Sachs favor Democrats, according to research by the non-partisan Center for Responsive Politics.
The Center found that Paulson and his wife, Wendy, have contributed more than $426,000 since 1989 to federal candidates, party committees and political action committees controlled by members of Congress. Most of the money—$370,000—has gone to Republicans, almost all of it from the Treasury nominee himself. His wife has given three-quarters of her share to Democrats.

The biggest beneficiaries of Hank Paulson’s giving have been the national Republican committees dedicated to electing party members to Congress, which have received more than $118,000 from him. Paulson’s contributions to President Bush have been small—just $2,000 in 2004 and nothing toward Bush’s 2000 election, apparently. Wendy Paulson has never made a donation to George W. Bush, but did contribute to his father's presidential campaign in 1992. In 2000, the Paulsons contributed to Bush’s rival for the Republican presidential nomination, Sen. John McCain of Arizona. By the 2004 re-election campaign, Hank Paulson had become one of Bush’s top fundraisers, raising at least $100,000 from other donors.

CEO Henry Paulson, who worked in the Nixon White House and Pentagon, is a Bush-Cheney campaign "Ranger," a title bestowed on individuals who have raised more than $200,000 for the president's re-election coffers. See related story on Wall Street donors.

And prominent ex-Goldman Republicans hold high-profile posts in the Bush White House. Stephen Friedman, who served as co-chairman of the firm with Rubin, became the head of President Bush's National Economic Council in 2002. That's the same position Rubin held under Clinton before moving to Treasury in 1995.

Joshua Bolten, who now heads the White House Office of Management and Budget after serving as Bush's top domestic policy adviser, previously worked for Goldman in London.

Also, Illinois Republican Jack Ryan, a former Goldman partner, is seeking to join Corzine in the Senate, running for the seat being vacated by Peter Fitzgerald.

[KansDem]

26. Color me naive, but what exactly did they do to earn these bonuses?

:shrug:

[npincus]

28. Only if I'm getting one.

:evilfrown:

[Jon8503]

31. It's a Wall Street bonus bonanza -- USA Today - Good Article

HO, HO, HO... Wall Street firms are expected to pay out a record $23.9 billion in bonuses this year. The top brass reap the biggest paydays, but the rank and file benefit, too. This year the average bonus is expected to top $137,000.

Total Average
20061 $23.9 billion $137,580

20051 $20.5 billion $119,390

2004 $18.6 billion $113,450

2003 $15.8 billion $99,930

2002 $9.8 billion $60,900

2001 $13.0 billion $74,140

2000 $19.5 billion $100,530

1999 $13.5 billion $75,010

1998 $9.1 billion $53,040

1997 $11.2 billion $67,800

Source: N.Y. State Comptroller; USA TODAY research

By Greg Farrell, USA TODAY
NEW YORK — Executives at Wall Street's top financial firms will probably remember this holiday season with particular fondness, as soaring profits cascade down to traders and bankers in the form of multi million-dollar bonuses.
This year, four of the top five brokerage houses have posted record earnings, paced by Goldman Sachs, where income jumped 68% over 2005.

Even Morgan Stanley, where an ugly internal putsch resulted in the ouster of an autocratic CEO last year, bounced back smartly in 2006, announcing a 51% rise in earnings Tuesday.

BURNING A HOLE IN YOUR POCKET? Some ideas on spending that bonus

Bear Stearns and Lehman Bros. also set records for revenue and earnings.

As a reward for Goldman's blockbuster performance, CEO Lloyd Blankfein received a staggering bonus of $53.4 million this week, the largest ever granted to a Wall Street CEO.

Joining Blankfein in the bonus stratosphere is Morgan Stanley CEO John Mack, who got $40.2 million last week.

Lehman CEO Richard Fuld got a seemingly modest $10.9 million bonus earlier this month. But don't shed any tears for him: Fuld also received a 10-year stock payout worth $186 million.

All told, this year's bonus pool for Wall Street executives hit $23.9 billion, the New York State Comptroller's office estimates. That's a 17% jump from last year's bonus pool of $20.5 billion, and it works out to an average bonus of $137,580 for every person employed in the financial services industry.

NOTE: Last paragraph in article.

"There's a disconnect between the economy and the financial system." says Richard Bove, who tracks the financial services industry for Punk Ziegel. "Income has to be generated somewhere. The financial sector has taken on a life of its own not connected to what's going on in the economy and ultimately, that has to be addressed."

http://www.usatoday.com/money/industries/brokerage/2006-12-20-wall-st-bonuses_x.htm

[HuffleClaw]

37. i see no reason to not 'agree' with it