Bonused

Posts Tagged ‘Street’

There are such things as “Executive Orders” – If Bush can pass the Patriot Act, Obama could sure as heck put a leash on Wall Street.

If American News Reporters can sit down with Iranians, Hillary could sure as heck sit down with Amadinejad and enter good dialogue.

What are your thoughts on the subject?

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Are they now collecting bonuses and paying off TARP loans based solely on 1st and 2nd quarter gains, or are they first having to overcome all of the losses they had during the meltdown?

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New York State Comptroller Thomas P. DiNapoli and staff recently conducted a study of New York City financial firms and the bonuses employees received in 2009. The study shows that bonuses rose nearly 17 percent, to $20.3 billion, during a year where the securities sector earnings are forecasted to exceed an unprecedented $55 billion.

Through the first three quarters of 2009, broker-dealer operations of New York Stock Exchange (NYSE) member firms earned a record setting $49.9 billion. In the previous year, the industry lost another record setting figure of $42.6 billion.

Compensation at major investment banks, including those that are more diversified than traditional brokers, such as Goldman Sachs, JPMorgan Chase, and Morgan Stanley, increased 31 percent in 2009. The average compensation rose more than $340,000, up 27 percent over the previous year. Citibank and Bank of America data was not included in these figures.

The majority of the largest financial firms are not paying their top executives cash bonuses, instead compensation is provided in the form of stock options and other forms of deferred payment. Also notable, is that the industry did not devote as much net revenue to compensating employees in 2009, as they have in past years. Over the past several decades, it wasn’t uncommon for salaries and bonuses to equate to as much as half of net revenue; however, in 2009 this amount was down to around 40 percent of net revenue.

Employment declined by roughly 31,500, or just under 17 percent of, jobs in the New York City securities industry between November 2007 and August 2009. Between August and December 2009 the industry managed to add nearly 3,900 new jobs. In a previous study by the State Comptroller, it was found that for every securities industry job created, three other jobs are created elsewhere in the state of New York.

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Copyright (c) 2008 Drew Stevens PhD

I just completed my morning coffee and dose of Wall Street Journal when I read that AIG the world’s largest insurer, spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, the expense-spent days after a massive billion-dollar bail out. These egregious individuals used money-borrowed money for an annual sales feast.

Not only is there issue with the timing of the event, but also once again, we take issue with leaders that lacking critical thinking, empathy, and humility. While many pundits find concern with interest rates and liquidity, the true issues lie in the leadership of many banking and credit institutions. The avaricious leadership of many organizations operates in a callous vacuum with little concern for its most vital assets- employees and customers. The items binding these assets to leaders are trust and respect, which appear to feverishly diminish. The problem with many of these leaders is creating a Darwinian environment. It is difficult to question the morale and productivity issue when so many leaders are narcissists and employees abhor their leaders.

Fortunately, there is a microcosm of these leaders. Many others understand the value of the employee and the mantra of customer first. Curiously, what is it that separates quirkiness from exemplary? We believe it comes down to six basic premises.

Exemplars. It seems ages ago, but leaders once were within organization. Names such as Iacocca, Lincoln, Ford, etc, were associated with pragmatism and trust. Very few leaders allow innovation, collaboration and excel at organizational communication. Present leader must illustrate vision and value. They need to say what they mean and mean what they say. When more leadership personifies with names such as Jobs, Kelleher and Barrett, the trust factor will return.

Accountabliity. Our firm speaks of this much simply because there is not enough. Leadership simply does not hold individuals accountable. In addition, current boards of directors do not hold leaders accountable. Ethically – speaking boards and their directors continue morale corruption stemming from perennial relationships. These must terminate. Boards must develop from strangers and stakeholders that desire organizational best interests. Further, boards and executives must be accountable. Rather than pacify with bonuses, and options, underperforming leaders must amend or terminate

Action. Similar to issues of accountability, organizations must require timetables and action steps. Employees and executives bemoan work. We often hear how occupied individuals are. We constantly hear of the complaints related to massive workload. However, statistics show that workload relates to procrastination. If organizations are so busy individuals would not have time for cigarette breaks, lunch or in the case of AIG spa outings. Ethics. Where are the ethics in organization? After the debacle of Enron and World Com, Congress developed the Sarbanes-Oxley Act to protect against flagrant behavior. Organizations cannot provide an ethics assessment for each leader, but clearly, organizations with issues lack leaders with integrity. When Boards of Directors place more checks and balances on the leadership, perhaps there is a return to normalcy.

Communication. Where is the feedback in organizations? Leaders must provide consistent and constant communication. A study by the Corporate Leadership Council in 2003 reveals leaders have a tremendous impact on an employee’s level of commitment, of which 70% is relationship. If communication is the core of any relationship, leaders cannot overlook the most vital tool. If leaders are too absorbed begin leaders, perhaps it is time for a change.

Trust and Respect. When leaders lose trust, they lose everything. We use an exercise in our workshops comparing good and bad leaders. The core or each is charisma and trust. Followers that trust leaders, do anything for them. Review history for great examples, from Attila the Hun, to Hitler to Saddam Hussein; the respective followers right or wrong, place all their faith because of trust. Similar to communication, trust is the core of great leadership.

What do you think? Please comment below to tell me.

Rep. Peter Welch introduced legislation to crack down on excessive Wall Street bonuses and help small businesses obtain the credit they need to survive and to create jobs. Welch unveiled the Wall Street Bonus Tax Act at a press conference at Burlington International Airport as he prepared to return to Washington for the 2010 legislative year. Welchs bill would tax bonuses at firms that have received assistance through the Troubled Asset Relief Program at a rate of 50 percent for all compensation in excess of $50000. Revenues generated through the tax would fund a new direct lending program administered by the Small Business Administration (SBA).

Any ideas?

Karl Marx thought of socialism as a transitional stage of society between capitalism and communism “distinguished by unequal distribution of goods and pay according to work done” (See Merriam-Webster). If the work done by Wall Street was massive wealth destruction and economic collapse, shouldn’t we be taking money back from them?

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I continue to remember that in 2007 the Ferrari dealers could not keep enough Ferrari’s in stock (especially red ones!) because so many of the of the investment bankers wanted to purchase this “toy” with a portion of their bonus checks.

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I just read this story:
http://www.nytimes.com/2009/01/29/business/29bonus.html?_r=1&ref=business
About how big failed financial firms like Bank of America have decided to pay out $4 billion to $5 billion in bonuses despite new, gaping losses that forced Bank of America to seek a second financial lifeline from Washington.
So it seems that these big institutions complain that they are broke, then they borrow taxpayer dollars, and then piss it all away on private jets, lavish parties, and billion dollar bonuses for their top executives.

WOW! How can I get some of this free cash? I could become a billionaire almost instantly !!!

My biggest question is: WHY DO THE AMERICAN PEOPLE CONTINUE TO ALLOW THEMSELVES TO BE ROBBED LIKE THIS???

Is everyone in America blind to this crime that is happening to them? It is not like some crook coming up to you with a gun and demanding $200 from your wallet, no, it is MUCH bigger. It is like a banker coming up to you with a gun and demanding your house, your car, all of your cash in your wallet and all of your savings in your bank, and then he feels good about what he has done, so he goes to your neighbor and does the same, and then on to the next guy, and so on and so on. This is crime beyond any in the history of America.

So why is it that people are not rioting in the streets and demanding something be done about it?

Any ideas?