Wall Street to pay 90 Billion in Bonuses
Jeanwah
Posts: 6,363
While the economy suffers...
Tax Fear May Move Bonuses Earlier
Congress is debating tax rates, and that has Wall Street nervously eyeing the calendar.
Worried that lawmakers will allow taxes to rise for the wealthiest Americans beginning next year, financial firms are discussing whether to move up their bonus payouts from next year to this month.
At stake is a portion of the hefty annual payouts that are a familiar part of the compensation culture on Wall Street, as well as a juicy target of popular anger. If Congress does not extend the Bush-era tax cuts for the highest income levels, a typical worker who earns a $1 million bonus would pay $40,000 to $50,000 more in taxes next year than this year, depending on base salary.
Goldman Sachs is one of the companies discussing how to time bonus season, according to three people who have been briefed on the discussions. Pay consultants who work with major Wall Street companies say that just about every other large bank has also considered such a move in recent weeks.
With tax politics in Washington unpredictable, bank executives have spent months sketching out several options for their bonus plans, including the possibility of an earlier payout. Lawmakers have been trading accusations across a partisan divide, but after this weekend, it appears likely that a compromise will extend the tax cuts for all income levels.
Even so, the banks’ discussions about bonus timing underscore how focused the industry is on protecting every dollar of pay.
A spokesman for Goldman declined to comment. Bonus payouts are traditionally shrouded in secrecy; companies are required to disclose their top executives’ pay, but they do not disclose the size of their total bonus pools in their public filings or internally.
Goldman, not surprisingly, is the canary in the coal mine. It often announces its top executives’ bonuses before other firms, and the richness of its payouts sets the tone across the industry.
This year the tax debate has imposed a new wrinkle, and executives at two large banks said their companies tentatively decided not to speed payouts, unless Goldman did. Then, these two executives said, they would consider paying early as a competitive measure, so that their workers were not upset.
These executives and the people briefed on the Goldman discussions spoke only on the condition of anonymity.
Bonus timing is also being discussed at scores of public companies, beyond banks, for top executives who receive multimillion-dollar payouts around the turn of the year. At most companies outside the financial sector, an early bonus would help only a handful of executives, while on Wall Street, the benefit would apply to many more workers.
“This has been a topic of conversation among those of us who are involved in designing and administrating compensation plans,” said Brian Foley, a pay consultant in White Plains, N.Y. “But I really would be surprised if anyone went down this path. This is a bounce-back year in terms of bonuses going up and probably not the time to draw attention to yourself.”
Wall Street firms pay out billions of dollars in bonuses each year. In good years top executives can receive bonuses worth tens of millions of dollars. Even midlevel financial workers often earn above $250,000 a year, and they receive most of their compensation as bonuses paid early in the new year.
Extending the tax cuts for all Americans with taxable income over $250,000 for joint filers ($200,000 for single filers) would cost the country about $40 billion next year, according to the Joint Committee on Taxation, and it would cost $700 billion over the next decade.
Currently the highest rate for taxable income is 35 percent; that would increase to 39.6 percent if the Bush tax cuts expire this year.
The top five Wall Street firms have put aside nearly $90 billion for total pay this year, and they are expected to raise that amount using their end of year earnings. That would make this year one of the best ever for bank pay.
As Mr. Foley said, much of the focus within banks is on the appearance of the payouts. Several senior banking executives received either no bonuses or modest ones in recent years, and with the taxpayer-financed bailouts receding, top executives are pushing to be paid well again.
More at http://www.nytimes.com/2010/12/06/busin ... gewanted=2
Tax Fear May Move Bonuses Earlier
Congress is debating tax rates, and that has Wall Street nervously eyeing the calendar.
Worried that lawmakers will allow taxes to rise for the wealthiest Americans beginning next year, financial firms are discussing whether to move up their bonus payouts from next year to this month.
At stake is a portion of the hefty annual payouts that are a familiar part of the compensation culture on Wall Street, as well as a juicy target of popular anger. If Congress does not extend the Bush-era tax cuts for the highest income levels, a typical worker who earns a $1 million bonus would pay $40,000 to $50,000 more in taxes next year than this year, depending on base salary.
Goldman Sachs is one of the companies discussing how to time bonus season, according to three people who have been briefed on the discussions. Pay consultants who work with major Wall Street companies say that just about every other large bank has also considered such a move in recent weeks.
With tax politics in Washington unpredictable, bank executives have spent months sketching out several options for their bonus plans, including the possibility of an earlier payout. Lawmakers have been trading accusations across a partisan divide, but after this weekend, it appears likely that a compromise will extend the tax cuts for all income levels.
Even so, the banks’ discussions about bonus timing underscore how focused the industry is on protecting every dollar of pay.
A spokesman for Goldman declined to comment. Bonus payouts are traditionally shrouded in secrecy; companies are required to disclose their top executives’ pay, but they do not disclose the size of their total bonus pools in their public filings or internally.
Goldman, not surprisingly, is the canary in the coal mine. It often announces its top executives’ bonuses before other firms, and the richness of its payouts sets the tone across the industry.
This year the tax debate has imposed a new wrinkle, and executives at two large banks said their companies tentatively decided not to speed payouts, unless Goldman did. Then, these two executives said, they would consider paying early as a competitive measure, so that their workers were not upset.
These executives and the people briefed on the Goldman discussions spoke only on the condition of anonymity.
Bonus timing is also being discussed at scores of public companies, beyond banks, for top executives who receive multimillion-dollar payouts around the turn of the year. At most companies outside the financial sector, an early bonus would help only a handful of executives, while on Wall Street, the benefit would apply to many more workers.
“This has been a topic of conversation among those of us who are involved in designing and administrating compensation plans,” said Brian Foley, a pay consultant in White Plains, N.Y. “But I really would be surprised if anyone went down this path. This is a bounce-back year in terms of bonuses going up and probably not the time to draw attention to yourself.”
Wall Street firms pay out billions of dollars in bonuses each year. In good years top executives can receive bonuses worth tens of millions of dollars. Even midlevel financial workers often earn above $250,000 a year, and they receive most of their compensation as bonuses paid early in the new year.
Extending the tax cuts for all Americans with taxable income over $250,000 for joint filers ($200,000 for single filers) would cost the country about $40 billion next year, according to the Joint Committee on Taxation, and it would cost $700 billion over the next decade.
Currently the highest rate for taxable income is 35 percent; that would increase to 39.6 percent if the Bush tax cuts expire this year.
The top five Wall Street firms have put aside nearly $90 billion for total pay this year, and they are expected to raise that amount using their end of year earnings. That would make this year one of the best ever for bank pay.
As Mr. Foley said, much of the focus within banks is on the appearance of the payouts. Several senior banking executives received either no bonuses or modest ones in recent years, and with the taxpayer-financed bailouts receding, top executives are pushing to be paid well again.
More at http://www.nytimes.com/2010/12/06/busin ... gewanted=2
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Comments
The people need to revolt!
Unfortunately, the people are too fat and lazy - at least in my country where the obesity rate is roughly 30%.
On a side note, the idiots in my country do not realize that because they are fat, unhealthy fucks, they are the ones responsible for draining our healthcare system. 135 billion dollars per year (and counting) is spent/wasted on obesity realted issues. Fuck people, wake the fuck up!!!
Is it that difficult to be healthy? Also, put down the cigarettes, people! 6 billion dollars a year is wasted on cigarette related illnesses.
We have really screwed up a good thing. Oh well, once we become extinct there will be a new race of beings. Hopefully, they are much smarter than us. The bankers and the Wall Street fucks have destroyed the lower and middle classes.
I hope every single person receiving a bonus suffers some horrible tragedy this Christmas season. Oh yeah, Christmas sucks.
Trickle-down economics is the word of God!! How dare you!!!
I prefer the term "voodoo economics."
it's all part of the narcissistic epidemic!
Trickle-down economics do work. Free markets do work. Rampant greed is the enemy.
It doesn't matter what system is in place (capialism, socialism, communism), each will produce corruption in specific ways.
where has trickle down economics worked??
I don't know why that's so despicable in they eyes of so many on this thread.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
it's despicable because they are going to executives who ran institutions that were major players in the global financial crisis ... to people who required bailout money from taxpayers ...
shit fuzzy I wish worked on wall street ! if you get a bonus man thats great, I'll bet the rest of us wish we were getting one where we work.....I'm really happy to just have a job but a bonus would be cool.
Godfather.
Well blame the government for that. They shouldn't have given them a dime. I vehemently opposed it. And it wasn't that they "required" money from taxpayers. It was that the government gave it to them without our consent.
Heck - if the government had been smart - which it NEVER will be - it would have made a no-bonus stipulation to the bailouts.
So if the fact that these are companies that received bailouts is REALLY the problem, then blame the government.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
I agree. Some of these companies should've been made to fail.
Where has spread the wealth worked?
However, I do think that there needs to be better regulation......a company that needs a bail-out should be limited in the bonuses that are allowed to pay out.
uhhh ... if you look at any major list of best countries in the world to live ... such as ...
http://www.newsweek.com/2010/08/15/inte ... tries.html
you will see that they are all littered with "socialist" type countries at the top ...
life is a team sport as we are all interconnected ... playing selfishly will never result in team objectives ...
exactly ... but at least now you know why the bonus' are despicable ...
I can't believe New Zealand only finished 13th - it's rigged!
I get a kick out of that every time my father-in-law goes on one of his anti-Obama rants and says socialzed medicine has NEVER worked ANYWHERE in the world. Telling him that NZ has socialized healthcare and it works perfectly fine doesn't help one bit, sadly.
I'll look at your list when I return home tomorrow and get on my computer.
Do you think that someone who makes a living by working hard and wants to keep as much of it as possible is being selfish?
yes and no ... it depends on whether that person understands the social implications of his or her desires ... no one lives in isolation or in a bubble ... we require others to interact and contribute ...
to value one's personal goals over those of the community will always result in a disparity of "wealth" which i believe fundamentally will not be good for the whole ... like i said ... life is a team sport ... the best teams are always the ones that sacrifice individual goals for that of the team ...
Everywhere, when done in moderation.
Peace
Dan
"Every judgment teeters on the brink of error. To claim absolute knowledge is to become monstrous. Knowledge is an unending adventure at the edge of uncertainty." - Frank Herbert, Dune, 1965
When record numbers of people do charitable giving annually, especially at Christmas (and that's Americans), I'd say yes, refusing to give to those in need, when you're quite well off, is selfish.
Agreed. I have friends and family that work on Wall Street. They are disgusted with it, but they have families to support. That said, they welcome higher taxes, tighter regulation, and financial reform.
Wall Street today is a fucked up Sherwood Forest - Take from the Poor and Give to the Rich! The financial services sector and the banking industry were never meant to morph into such a disgusting beast. Their main goal was to help individuals and small businesses get loans and start/expand businesses. And while they still do this, they always have profit and greed on their minds. Always. They play with people's money, use people's debt to their own personal, selfish gain, and ultimately (and consistently) enact unethical (but not illegal due to massive deregulation since FDR) to make money off of the people.
And, you know what would have prevented all of this, and what would have prevented the imbalance of outsourcing - Socialism. Yes, the ideals of Evil Socialism would have made sure that these companies are working for the people; it would have made sure that companies were not allowed to outsource jobs and essentially put so many Americans out of work. This is what Capitalism has done.
Nuke Wall Street. Just tell the few good people to not show up for work that day.
Milton Friedman - The Man Who Knew Economics
Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist, statistician, a professor at the University of Chicago, and the recipient of the Nobel Prize in Economics. He was an economic advisor to U.S. President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a professor of the Chicago School of Economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession. "The Economist" described him as "the most influential economist of the second half of the 20th century…possibly of all of it".
Now as to why I invoke the name of this great economist.
I watched a video of this man, holding a pencil. He plainly stated that in this whole world there is not one man who could make that pencil. It took thousands of people - different nationalities, religions and goals. The rubber for the eraser comes from Indonesia; the wood shaft from Oregon; the graphite from South America. And yet they all came together, seamlessly, to create that pencil, and in so doing they were able to sell it for a nickel.
When asked how it was possible to do that, and still keep the price to 5 cents, Friedman simply said, "The government was not involved in it."
Friedman is noted as an economic genius - which probably explains how he won the Nobel Prize in economics. Yet many people still do not understand, nor accept his "trickle down" economics. But it is also noteworthy that none of his detractors ever won the Nobel Prize. Most have never even studied economics.
If you already understand the trickle down theory, you are likely a left-brain thinker (so it is also likely you are a conservative or Libertarian). For the rest of you, I hope I can put it in simple terms, because if we are ever to get out of the mess we are in, and stay out, people need to understand the concept.
No, the trickle-down theory did not get us into this mess. Neither did the free market or capitalism. Every time - EVERY time - the economy shifts even a little, the government, in its infinite arrogance and stupidity, steps in. The FED meddles with interest rates, or prints more Benjamins. Congress passes more regulations. And more regulatory agencies are created. Frankly, the only time in the last 50 years that we relied heavily on free markets, capitalism and trickle-down economics was during Reagan's presidency, where he used it to reduce 20% interest rates, 10.3% unemployment rates and runaway inflation. And it worked. Those who say it did not are either being dishonest or ignorant.
Some say trickle-down did not work because the economy did not STAY healthy. But again, that is because after Reagan, government again began meddling in the economy.
Trickle-down economics is like anything else - left alone, it will move onward and seek its own level. But when the government puts up dams to regulate it, then it is no longer Trickle-Down. And that is what we have had for most of the last 50 years - government building dams. And now we have a government that is actually trying to PUMP the economy with trickle-up economics. That's no different from trying to make water flow uphill - while you can force it to do so, it only comes at great expense and wasted energy - only to have it flow back down again.
So, here it is in a nutshell. Left unhampered, no economy can even begin except at the top. Poor people do not have the money, assets or education to fire up an economy. If, for example you experiment with a new economy in a vacuum, where you have people but no business, no products, you have stagnation. If you give money to the people, they cannot spend it on products - there are none.
It is only when some enterprising individual creates a product or service that the people can finally become consumers. But the PRODUCTS must come first - else, there is nothing to consume. If the products and services must come first, then that is where the flow of money must begin.
Someone starts a business and produces a product by investing money into it. Investing in a facility, inventory, marketing, shipping, and, of course, employees. And the money begins trickling down - from the owner, to the vendors and employees, to the allowances of the employees children. Money flows. And it flows back up as consumers buy more products, which creates bigger demand, so the business owner must buy more inventory and hire more people. And more money trickles down.
That is the ONLY way an economy can grow. If you doubt that even for a moment, try starting a small "family economy" from scratch without providing any products or services first. Or try starting up a store with nothing on the shelves, hoping that consumers will bring you their money, and you can then use their money to buy products for your shelves. Good luck with that!
If you don't have products or services already available, no one can or will buy them.
Now understand the second most important fact of Trickle-Down. Every business has one goal - to make a bigger profit each year. If you are not growing, you are dying. Period. Growth requires the investing of more money. In order to invest more money, you need to EARN more money - and be able to keep it.
But when government decides that class warfare makes good politics, they play the masses against the "rich". This results in punishing the rich with ever-increasing taxes while reducing taxes for everyone else. They think this is good for the country. But it will destroy the nation. Every government regulation, every manipulationof interest rates, every printing of more money as debt is another log in the dam, slowing the economy.
And every dollar of tax imposed against a business is another dollar the business cannot invest. Don't think for a moment that those extra tax dollars you take from the rich are coming out of their "lifestyle" expenses. No, they come out of investment capital. If given a choice between giving up the yacht and giving up an employee, human nature says the employee will be the loser. So, taxing the rich only makes things worse, not better. Besides, every tax is always passed on to the people below, in higher prices. Even you pass on your taxes by demanding raises to adjust for the increases in your taxes. So then your employer, to pay for your raise to pay your taxes must now jack up the cost of his products, and consumers pay your taxes - and the business owners taxes. Taxes, like money (or water, or seweage or anything else) flows downhill. That is why the poor are poor, and why they stay poor. If you raise taxes on the rich, the poor will be the only ones to suffer.
When you take from the rich, they cannot invest in growth. Jobs are not created. Products are not made available. Demand begins to outstrip supply, and prices rise. And a recession (or depression) is the result.
But many on the left say, "We'll give that money to the poor. They will spend it and that will fuel growth." But what will they spend it ON, if products are not being made? If jobs are not available for continued prosperity? And if they do spend it on products that are going up in price, why would the business owner reinvest it for growth if he knows the government is just going to take it away?
Look, folks - Friedman knew there was more to an economy than the flow of money. There is human nature, human needs, greed and more. They all work together, like all those people that make a five-cent pencil. And the minute government gets involved in any way, it throws everything out of balance.
What we need is a government that, as Reagan so aptly put it, just gets the heck out of our way.
Yes, there will be winners and losers - and liberals don't like anything that includes losing. They think everyone should win. But that is not reality. It is not natural. And it simply cannot work. It cannot work because of human nature, needs, greed etc.
Face it - if you were assured of having everything everyone else had, regardless of whether or not you earn it, why would you work harder or smarter than the next guy? Why would you risk everything to start a business if you could not get anything out of it because it all gets shared with "the community of Man?" You would not. And that is why communal living (communism, socialism etc.) does not work. And that is precisely why "social justice" is a travesty against nature and God. We are obligated to help ease the suffering of our neighbor, but we are not obligated to raise him up to our own level. That is for him to do, if it will be done at all.
http://success-by-design.blogspot.com/2 ... omics.html
Capitalism is tarnished by the dog-eat-dog brand of competition it sustains, but compared to the other choices out there, I'll take my chances.
A friend of mine earned a bonus more than 4 times what i can earn in a good year. He has no guilt about receiving this and actually mocked the people that complained. It's a shame the government bailed out his bank as it would have been good to see him jobless and on the scrapheap.
This is not an example, it's an explanation. I want examples of when it's actually worked.
And -- when Reagan cut taxes for the rich, it vanished the Middle Class. Instead of trickle down, it just made the rich richer and the poor poorer.
Examples are everywhere. The fact that companies make higher profits year-to-year when there is less government obstructionism is an example. The free-market system is an example.