The recalcitrant stupidity of Wall Street Bankers
As Banks beg for bailouts from the US government and the decimated, imploded US economy still shudders from the housing bubble some banks have taken the extraordinary step to reward staff with financial bonuses for performance in 2008.
Is there any better example of an industry still out of touch and cannot see or read the political and social boundaries?
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bo⋅nus [boh-nuhs] –noun, plural -nus⋅es.
1. something given or paid over and above what is due.
2. a sum of money granted or given to an employee, a returned soldier, etc., in addition to regular pay etc.
While the fires still rage along Wall Street and the ripple of economic decimation reverberate not only throughout the United States but through so many other world economies, those self-annointed “Masters of The Universe” from Wall Street have rewarded themselves with, as has been revealed by the New York State comptroller, over US$20 billion in bonus payments to staff.
This extraordinarily stupid decision by bankers truly demonstrates the naivety, lack of management and emotional intelligence that the leaders of Citibank, Bank of America and Merrill Lynch - who actually moved the bonus payment dates prior to their acquisition by Bank of America - have provoked with yet another crisis in confidence by their demonstrable stupidity and lack of their understanding of politics, ethics and public perception.
President Obama labelled Wall Street bankers as “shameful” for giving themselves the bonuses as the economy continues to collapse and the US government is spending billions to bail out some of those very same banks.
One company didn’t succumb to stupidity. AIG have frozen salaries, no bonus and nor any rewards unless it is directly related to improving the business. CEO Edward M. Liddy will completely forego his 2008 and 2009 salary.
Liddy will receive a $1 salary for 2008 and 2009 but may be eligible for stock grants in 2010 - if he performs. “We are extremely grateful for the assistance we have received, and we know we have an obligation to use that assistance to help AIG recover, contribute to the economy and repay taxpayers,” Liddy says. “This action by the senior management team demonstrates not only that we understand our obligation to taxpayers and shareholders, but also that we are committed to the future success of this organization.”
I’m personally infuriated at these Wall Street types. I’ve lost my job (but since recovered) due to a bandied catch phrase “sorry but we’re downsizing due to the Global Economic Crisis”.
Despite my circumstances, I have no problem with high bonuses that can amount to millions of dollars but in the right place, the right time and in the right context. My salary today is down 60% but I take the view that 40% of something is better than 100% of nothing.
Anyone working in the particular sectors e.g. finance, has to carry the burden of their and management incompetence. A bonus is to reward good performance and encourage performing individuals to stay with the firm.
None of the banks can justify any of these bonus actions because they have retrenched so many staff, there is now a solid pool of unemployed talent available.
If I were CEO at any of these institutions, salary cuts mandatory and bonuses abolished till their houses were in order.
Perhaps Liddy is destined yet for greater things. What do you think?
Tags: AIG, Bank of America, Citibank, Financial Crisis, financial press, President Obama, Wall Street