Results tagged “bonuses”

In case you need more cause besides Balloon Boy to vomit, then revel in details of Goldman Sachs' success. The NY Times reports, "Only months after paying back billions of taxpayer dollars, Goldman Sachs is on pace to pay annual bonuses that will rival the record payouts that it made in 2007, at the height of the bubble. In the last nine months, the bank set aside about $16.7 billion for compensation — on track to pay each of its 31,700 employees close to $700,000 this year. Top producers are expecting multimillion-dollar paydays." The Times adds, "This much is indisputable: Goldman Sachs is minting money."

The fallout of its Merrill Lynch deal continues: Today, Bank of America agreed to reveal private documents about its Merrill takeover. A spokesman said, "We don’t have anything to hide... Attorney-client privilege is an important business principle, but the pressure in multiple inquiries to provide additional insight convinced us it is appropriate to waive in this instance to get the issue behind us." Someone eager for these documents: AG Andrew Cuomo, who blasted the company for letting Merrill give $3.6 billion in bonuses even though it had a $9 billion 4th quarter loss.

A survey done by eFinancialCareers.com of 1,074 Wall Street workers said that 83% of people expected some sort of bonus, 36% expected a bigger bonus, and 11% expected that bonus to have increased by half from last year. This of course comes after a year of credit collapse and soaring unemployment, which many say was fanned by ridiculous pay packages.

Goldman Sachs, a recipient of billions of dollars in government bailout money, has built up $16 billion in its bonus pool so far this year, according to the Post. This is on track to be the largest year for bonuses ever. In unrelated news, the national unemployment rate is still above 10%.

New York City public schools are performing so well according to the DOE's assessment that the performance bonuses earned by teachers is bursting the budget. With 97% of elementary and middle schools earning A's or B's in their annual grades from the Department of Education, yesterday it was revealed that such high marks meant the city would have to shell out $33 million in bonuses, almost twice last year's total despite a slimmer budget and two million over the program's budget before high schools are even accounted for. One education consultant told the News, "It's clear the bonuses are a complete waste, with the reading and math exams becoming easier and easier."

NY Attorney General Andrew Cuomo scored a win when a judge ruled that the names of Merrill Lynch employees who received big bonuses are not secret. New York State Supreme Court Justice Bernard Fried wrote, "The record does not support the intervenors' claim that the employee compensation information is a trade secret." Cuomo, who has been seizing outrage over crazy bonuses for employees at companies receiving bailouts funds, says he'll make the names of the Merrill employees public, possibly even today. While headhunter called it a "witch hunt," Cuomo said it was a "victory for taxpayers" and heeded this warning, "Bank of America [which took over Merrill Lynch] chose litigation over transparency and we are gratified that this tactic has failed. AIG should take heed and immediately turn over the list of bonus recipients we have subpoenaed."

Republican Senator Charles Grassley of Iowa told a Cedar Rapids radio station how he really feels about the AIG executives taking bonuses after needing to be bailed out with $170 billion in federal money: "I suggest, you know, obviously, maybe they ought to be removed. But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide. And in the case of the Japanese, they usually commit suicide before they make any apology." His spokesman later said Grassley was speaking rhetorically.

Former Merrill Lynch CEO and connoisseur of finely decorated offices John Thain obeyed a judge's order that he spill the beans on Merrill's $3.6 billion in bonuses. See, Thain claimed he wasn't allowed to discuss the extravagant bonuses—which came right before Merrill announced a $15 billion 4th quarter loss—which pissed off Cuomo, who then filed a motion to force Thain to speak up. The Daily News reports, "Dodging a press gauntlet, Thain slipped into the lower Manhattan tower that houses Cuomo's offices through a subway entrance." But Thain still left through a back entrance, which was perfect opportunity for some photo ops. Thain's former bosses at Bank of America (which took over Merrill) were also subpoenaed by Cuomo.

President Obama, who called Wall Street's bonuses "the height of irresponsibility", and Treasury Secretary Timothy Geithner announced that executive compensation at banks receiving TARP (Troubled Asset Relief Protection) funds should be capped at $500,000. Obama said, “In order to restore our financial system, we’ve got to restore trust. And in order to restore trust, we’ve got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street," while Geithner added, "There is a deep sense across the country that those who are not responsible for this crisis are bearing a greater burden than those who were." Which is why Goldman Sachs is eager to pay Uncle Sam back for the money the firm received. Goldman CEO David Viniar said, "We’d be under less scrutiny and under less pressure," plus, "It would send a very good signal" if they repaid it. Hey, by all means, pay it back!

AIG, the troubled insurer that the Feds bailed out to the tune of $85 billion in September, was accused by Rep. Elijah Cummings (D-Maryland) of "stonewalling" Congress when AIG said it couldn't come to D.C. for a meeting to discuss executive pay last week. Now AIG CEO Edward Liddy tells CNBC that Cummings didn't give him enough time to prepare, "I got a letter on Tuesday asking for more information. We simply couldn't provide the information in time for a meeting on Thursday." Liddy, who said AIG has been "very transparent," also said that retention bonuses were important for keeping employees, "If we don't do that, we will not be able to pay back the federal government." Related: The AP tallies how many private jets are owned by financial firms that received bailout money, noting that while automakers are getting nailed for private jetting, Wall Street firms still are (AIG has 7 private jets).

In what continues to be a familiar story of cat and mouse in politicians pointing the finger as to where funds aren't coming from, Governor Paterson yesterday claimed the state lost hundreds of millions in tax revenue because less big Wall Street bonuses are being given out this year. Many CEOs and senior executives agreed to take significantly smaller (or no) bonuses after pressure from Attorney General Andrew Cuomo, in the end nearly halving last year's total of $50 billion in bonuses. Paterson originally claimed that Goldman Sachs' lack of bonuses alone would cost the state $178 million, but an aide later clarified that was just an estimate of how much taxable income was lost. Still the governor sounded grave saying, "This is a very, very difficult year for Americans. But I don't think it has been fully realized ... it could theoretically become another depression, it is that difficult."

The NY Times has been running a series of articles "exploring the causes of the financial crisis" and, for today's piece, it explores Wall Street bonuses. And how small groups of senior executives got very real bonuses when their companies' profits were imagined. The prime example is Merrill Lynch's bonus system: In 2006, $5-6 billion in bonus money was handed out; Dow Kim, who headed the mortgage business, made $35 million (99% in bonus money). "But Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value." A Harvard Law professor chimes in, "Compensation was flawed top to bottom. The whole organization was responding to distorted incentives.” Which brings us to the present: Credit Suisse is using "illiquid assets" to pay bonuses!

The financial markets may be taking a hit lately, but Wall Street is still planning about $38 billion in bonuses this year. Bloomberg News reports that the money was thanks to "a record $9 billion of fees for arranging acquisitions and $5 billion for underwriting initial public offerings and sales of junk bonds." This translate to an average Goldman Sachs, Merrill Lynch, Morgan Stanley, Lehman Brothers or Bear Stearns worker getting over $200,000 in bonuses....