Top Wall Street bankers to receive $70bn pay deal

[IllTestYourGirls]

http://www.guardian.co.uk/business/2...laries-banking

Pay and bonus deals equivalent to 10% of US government bail-out package

Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40.4bn), a substantial proportion of which is expected to be paid in 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 will pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted widespread criticism. The government cash has been poured in on the condition that excessive executive pay will be curbed.

Pay plans for bankers have been disclosed in recent corporate statements. Pressure on the US firms to review preparations for annual bonuses increased today when Germany's Deutsche Bank said many of its leading traders would join chief executive Josef Ackermann in waiving millions of euro in annual payouts.

The sums that continue to be spent by Wall Street firms on payroll, payoffs and - most controversially - bonuses appear to bear no relation to the heavy losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year; Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.

At one point last week Morgan Stanley's $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.

In the first nine months of the year Citigroup, which employs thousands of staff in the UK, accrued $25.9bn for salaries and bonuses, an increase on the previous year of 4%. Earlier this week the bank accepted a $25bn investment by the US government as part of its bail-out plan.

At Goldman Sachs the figure was $11.4bn, Morgan Stanley $10.73bn, JP MorganChase $6.53bn and Merrill Lynch $11.7bn. At Merrill, which was on the point of going bust last month before being taken over by Bank of America, the amount accrued in the last quarter grew 76% to $3.49bn. At Morgan Stanley, the amount put aside for staff compensation also grew in the last quarter to the end of September by 3% to $3.7bn.

Days before it collapsed into bankruptcy protection a month ago Lehman Brothers revealed $6.12bn of staff pay plans in its corporate filings. These payouts, the bank insisted, were justified despite net revenue collapsing from $14.9bn to a net outgoing of $64m. None of the banks the Guardian contacted wished to comment on the record about their pay plans.

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

Much of the anger about investment banking bonuses has focused on boardroom executives such as former Lehman boss Dick Fuld, who was paid $485m in salary, bonuses and options between 2000 and 2007. Last year Merrill Lynch chairman Stan O'Neal retired after announcing losses of $8bn, taking a final pay deal worth $161m. Citigroup boss Chuck Prince left last year with a $38m in bonuses, shares and options after multibillion-dollar write-downs.

In Britain, Bob Diamond, Barclays president, is one of the few investment bankers whose pay is made public. Last year he received a salary of £250,000, but his total pay, including bonuses, reached £36m.

One London-based banking source, who worked for a US bank, said many in the City were expecting star traders to see little reduction in their bonuses.

"The real 'rain-makers' will not notice an impact. It will be the more middle-ranking people who will be really hit."

[dav3]

what a bunch of shit. in some countries, these same people would receive 10 lashings in public.

[marketsmart]

total bullshit...

but liken this situation to tube sites... people will complain, complain, but at the end of the day people are too afraid or lazy to do anything about it..

[pocketkangaroo]

So basically we bailed out their bonus checks?

[IllTestYourGirls]

How many of you are going to vote for your congressperson or senator that voted for the bailout?

[12clicks]

These bank executives were forced to make low income risky loans by the government.
Nothing they could do.
They should get paid their going rate.

[EscortBiz]

Originally Posted by dav3

what a bunch of shit. in some countries, these same people would receive 10 lashings in public.

in this country some of these bankers pay millions a year to a dominatrix for 10 lashings in private

[StuartD]

If Joe the Plumber bankrupts the company he wants to buy, will the government give him billions to bail him out?

[seeric]

Originally Posted by 12clicks

These bank executives were forced to make low income risky loans by the government.
Nothing they could do.
They should get paid their going rate.

yah. fucking ironic though that both the schmucks debating keep talking about joe the plummer kinda bullshit, and im eric the developer and i cant get a fucking credit card or loan to build my company because the system is all fucked up. i have impeccable credit and i can't get a credit card or a loan for my company right now. denied again at bank of america this week. this whole thing is a massive cluster fuck.

we will talk monday btw.

[dav3]

Originally Posted by EscortBiz

in this country some of these bankers pay millions a year to a dominatrix for 10 lashings in private

touche

[IllTestYourGirls]

Originally Posted by A1R3K

yah. fucking ironic though that both the schmucks debating keep talking about joe the plummer kinda bullshit, and im eric the developer and i cant get a fucking credit card or loan to build my company because the system is all fucked up. i have impeccable credit and i can't get a credit card or a loan for my company right now. denied again at bank of america this week. this whole thing is a massive cluster fuck.

we will talk monday btw.

shit seriously? GL man.

[GregE]

Originally Posted by dav3

what a bunch of shit. in some countries, these same people would receive 10 lashings in public.

Yeah, but some countries are very crude.

I'm thinking Super Bowl halftime show here.

First, clear the field and then herd maybe two or three half-starved lions onto one side of that same field. Meanwhile, I think it would be prudent to choose an entrance on the other end of the field to herd the bank executives in.

It would be a hell of a show

[IllTestYourGirls]

Originally Posted by GregE

Yeah, but some countries are very crude.

I'm thinking Super Bowl halftime show here.

First, clear the field and then herd maybe two or three half-starved lions onto one side of that same field. Meanwhile, I think it would be prudent to choose an entrance on the other end of the field to herd the bank executives in.

It would be a hell of a show

Its not the bankers fault. They can not even deny the money. Senate made sure they HAD TO TAKE the money even if they dont want it. I know the likelihood of them not wanting it is slim.. but you get the idea.

Including Obama and McCain