Wall Street Gets Religion
Is the sky falling? Are pigs flying? Apparently Wall Street executives have become sensitive to the fact that while people are losing their jobs and their homes, financial industry executives are getting set to reap big year-end bonuses, courtesy of the American taxpayer.
They’re actually thinking of curbing some of those rewards, The Wall Street Journal reports today.
From the Journal:
“To the guy in Kansas making 60 grand a year and losing his house, it seems like madness to bail out firms at a favorable interest rate and see them have thousands of people making millions of dollars a year — and it is madness,” said Alan Johnson, a New York compensation consultant.
So Wall Street may take a few steps to stop the madness. But let’s call them what they are — baby steps. The idea is to make sure bonuses for chief executive officers decline sharply. But lower-level traders and investment bankers, who could be plucked away by other firms, still will see generous bonuses.
I assume that means even if those employees played a big role in the fostering the subprime housing bubble, they’ll still get bonuses, because other firms would want their obviously invaluable services.
The Journal notes that Wall Street isn’t really going to give up without a fight:
The wide-ranging pay talks follow demands for information about compensation plans. Some firms have considered hiring one outside law firm to represent the nine companies on the Treasury Department’s initial list of capital recipients in their response to this week’s demands by New York Attorney General Andrew Cuomo. Top traders, who can out-earn CEOs in a good year, are concerned about possible disclosure of their names and pay.
There’s a lesson in here somewhere. I’m just not sure exactly what it is.