On Wall Street, the Good Old Days Are Back Again When It Comes to Pay
Bank employees may not be digging into their pockets to make campaign contributions they way they used to, as Elana reports today, but those pockets are apparently becoming deep as they were during Wall Street’s boom times. According to The New York Times, Wall Street compensation is climbing again and may reach the same levels as it did in 2007, when times were much better — and before the financial crisis began. Stronger bank profits are being cited as the cause, though some analysts tell The Times that Wall Street is simply returning to its old, highly lucrative compensation practices:
Even as the industry’s compensation has been put in the spotlight for being so high at a time when many banks have received taxpayer help, six of the biggest banks set aside over $36 billion in the first quarter to pay their employees, according to a review of financial statements.
If that pace continues all year, the money set aside for compensation suggests that workers at many banks will see their pay — much of it in bonuses — recover from the lows of last year.
“I just haven’t seen huge changes in the way people are talking about compensation,” said Sandy Gross, managing partner of Pinetum Partners, a financial recruiting firm. “Wall Street is being realistic. You have to retain your human capital.”
Brad Hintz, an analyst at Sanford C. Bernstein, was more critical. “Like everything on Wall Street, they’re starting to sin again,” he said. “As you see a recovery, you’ll see everybody’s compensation beginning to rise.”
The only hope here is that corporate boards do a better job of policing this sort of thing than they did in the past, and that the public pays closer attention to it — as it should, considering the billions of taxpayer dollars that have gone to bail out many of these banks.
You might think that some sort of lesson would have been learned from a crisis this severe. But not on Wall Street, I guess. If financial executives truly want to understand why the public is so angry with them, here’s yet another reason.