Financial workers at Wall Street's top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in bonuses, for their work so far this year - despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.
Staff at six banks including Goldman Sachs and Citigroup will pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted widespread criticism. The government cash has been poured in on the condition that excessive executive pay will be curbed.
Now I suppose much of this was agreed before the bailout plan - and there might well be employment law issues if they went back and reviewed it.. but still - I get the impression the policies of the company have been at least to some extent co-opted by the interests of the senior staff. Actually in my experience this seems to occur to some degree in other businesses too so I should not be surprised.
I wonder if there will be a massive drop in the wage bill for these banks next year - I presume there will be. Of course the problem there is there might also be a huge loss of talent. that might be less of a problem if the banks had never had that talent but there is a danger that systematically less talented and much less experienced people might try to hold together systems built up by more talented and experienced folk resulting in disaster. Imagine if the banks had the lowest budget of any significant company for a CEO - as a result being unable to hold a CEO for more than 6 months before some IT start-up poached him. that would be interesting...
So easy to screw it up - but still... maybe those banks don't need to pay those guys quite so much.