Above: Investment banker
I bet a lot of folks wish they had jobs where they got multi-million dollar bonuses no matter how badly they had done that year:
It’s no secret that investment bankers are well-compensated, mostly through year-end bonuses, especially during bull markets.
But can they still count on those big bonuses this year, in the midst of the financial crisis and market freefall?
CBS News correspondent Priya David spoke with several compensation consultants who said that, even in this economy, firms are worried that, if they don’t pay out the bonuses, they’ll lose their top talent — people they want to keep around for when pastures turn green again…
According to a report from financial news agency Bloomberg, Goldman Sachs, for example, has set aside $6.8 billion for bonuses, and Morgan Stanley, $6.4 billion.
And the best part is — guess who’s paying for those hefty bonuses? Quite possibly, you are:
Some observers, such as financial expert and reporter Stephen Gandel, say bonuses are expected to be down, but not as much as they might have been without the bailout.
Gandel, who’s a Money magazine senior writer and contributor to Time.com says, “Compensation should be down 70 percent but, because all this new money is coming from the government, the firms are now saying they can pay more, and so they’re only going to cut bonuses by 40 percent.”
Even without bonuses, the mean annual salary for a securities industry employee was just under $400,000, David notes, ten times more than the average U.S. worker.
Ten times more. And that’s without the bonus. Unbelievable.
Comments (1)
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I've never seen a blog posting that proves itself wrong so quickly.
"CBS News correspondent Priya David spoke with several compensation consultants who said that, even in this economy, firms are worried that, if they don’t pay out the bonuses, they’ll lose their top talent — people they want to keep around for when pastures turn green again…"
So, basically, companies are paying the minimum they need to pay to keep their employees. Supply and demand? Does that sound familiar? I would say it's Econ 101, but I'm pretty sure most high schools teach that...
Posted by AH on November 14, 2008 at 4:45 AM
Posted on November 14, 2008 at 4:45 AM