Bangkoktraveler Posted March 20, 2009 Report Share Posted March 20, 2009 Bonus for good work is one thing, but a bunch of these characters got 1 million dollars or more in bonuses while the company is in effect what some might call a modified receivership. Don't you think a $165 million pot split among 418 people is a little bit excessive? Bank of America claims they got took to the cleaners when 39,000 people at Merrill Lynch & Co. received $3.6 billion in bonuses last year just before Bank of America took them over. I think the great bailout didn't come from the government but employees helping themselves to whatever they wanted from their place of work. It is as if they were all in unison in voice in saying "Let's fuck them all!" Link to comment Share on other sites More sharing options...
shygye Posted March 20, 2009 Report Share Posted March 20, 2009 The "bonus system" also encourages doing risky deals. No one gets paid a bonus for quashing a bad deal. Shouldn't bonuses be paid out of profits? If the company is not profitable then no bonus. That's not exactly true. Risk Management gets bonuses and their job is precisely to stop bad deals and trades. However' date=' their bonuses are smaller and they attract weaker talent when actually they need to be smarter than the traders to make their case effective. Risk mgmt is broken at most banks. ...[/quote'] The risk management guys get bonuses based on the deals it approves! Not on the deals it stops! No bonus for stopping bad deals! Link to comment Share on other sites More sharing options...
HeartThais Posted March 20, 2009 Report Share Posted March 20, 2009 The "bonus system" also encourages doing risky deals. No one gets paid a bonus for quashing a bad deal. Shouldn't bonuses be paid out of profits? If the company is not profitable then no bonus. That's not exactly true. Risk Management gets bonuses and their job is precisely to stop bad deals and trades. However' date=' their bonuses are smaller and they attract weaker talent when actually they need to be smarter than the traders to make their case effective. Risk mgmt is broken at most banks. ...[/quote'] The risk management guys get bonuses based on the deals it approves! Not on the deals it stops! No bonus for stopping bad deals! Not where I work. Link to comment Share on other sites More sharing options...
unit731 Posted March 20, 2009 Report Share Posted March 20, 2009 Since when is a bonus 'contractual'? Some of you big business types, please explain. I have heard of a 'performance' bonus, but one actually has to show performance. Were these performance bonues? If so, did they perform? Even as the company tanked? I don't get it. Link to comment Share on other sites More sharing options...
HeartThais Posted March 20, 2009 Report Share Posted March 20, 2009 When it is a guaranteed minimum bonus to keep you from leaving for a competitor. Link to comment Share on other sites More sharing options...
unit731 Posted March 20, 2009 Report Share Posted March 20, 2009 When it is a guaranteed minimum bonus to keep you from leaving for a competitor. Thanks. I guess I'm kinda mixed on this. If ones employment - one aspect is a contract that provides money for one to stay - then why not take the money? I surmise that this is kind of murky waters. I think if they had used another word there might not be this 'outrage' out there. If these are the same guys and gals who screwed up the company - opinions differ about the word 'bonus' and the taking of such by the employees. A promise is a promise. Should the management 'recind' this aspect of the employment contract? Should these employees give back the 'bonus'? Link to comment Share on other sites More sharing options...
cavanami Posted March 20, 2009 Report Share Posted March 20, 2009 I see the bulk of the issue is that the US gov bailout did not exclude the bonus payments. I, as a US taxpayer, do NOT want my tax dollars going to bonus payments! My wish/demand, whatever. Up to me!!! Link to comment Share on other sites More sharing options...
HeartThais Posted March 20, 2009 Report Share Posted March 20, 2009 Well, there are probably a lot of AIG employees that are not American. So this 90% tax plan punishes Americans only. Meanwhile, AIG is basically TARP II and it goes beyond borders. The counterparties include the Goldman's and Morgan Stanleys but also the foreigners like Deutsche Bank, UBS, etc. The AIG bailout is nothing more than a sneaky way of getting additional funding to these banks, including non-American banks. So the way I see the story is that if we enact the 90% tax plan, we're going out of our way to punish Americans for the benefit of banks. Ok, I sound like a broken record but this special tax legislation is a huge red herring to distract the public from seeing how our money is really being used. And we are falling for it hook, line and sinker. Link to comment Share on other sites More sharing options...
HeartThais Posted March 20, 2009 Report Share Posted March 20, 2009 unit, I really don't think the wall-street bonus system is the result of fat cats scratching each other's backs. My impression is that the bottom-line matters much more in finance than any industry I've ever seen and I've seen a lot. You can have 10 successful years but 1 blow-up and you'll be sent packing without a tear. The bonus system is designed to get an entire work force to give up their lives for the cheapest cost to the firm. If you look at the distribution of bonuses, only a very small percent make the big bonuses. The rest are aspirants and most will give up their lives, not to mention the countless hours they spend off the job to compete. It is a huge carrot and most will never reach it. The bonus system not only draws the best and brightest but ensures their voluntary indenture to the firm. It also creates a moral hazard as shygye pointed out. Link to comment Share on other sites More sharing options...
shygye Posted March 20, 2009 Report Share Posted March 20, 2009 The "bonus system" also encourages doing risky deals. No one gets paid a bonus for quashing a bad deal. Shouldn't bonuses be paid out of profits? If the company is not profitable then no bonus. That's not exactly true. Risk Management gets bonuses and their job is precisely to stop bad deals and trades. However' date=' their bonuses are smaller and they attract weaker talent when actually they need to be smarter than the traders to make their case effective. Risk mgmt is broken at most banks. ...[/quote'] The risk management guys get bonuses based on the deals it approves! Not on the deals it stops! No bonus for stopping bad deals! Not where I work. I bet it is true where you work. Show me the bonus formula for the risk management guys at your place of employment. I am sure it includes the revenue booked by the dept the risk guys are overseeing. Link to comment Share on other sites More sharing options...
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