Give Me My Bonus!

It has always be a right of passage for investment bankers on Wall Street and with other financial service industries tied to it to give year end bonuses in February, yes, I said, February. Why you ask February? Because by then, the year end numbers are crunched, documents filed with the SEC and earnings reported to shareholders so that the overall performance for the year prior has been firmly established before the compensation process begins. Meanwhile, over Christmas vacation or when they returned at the beginning of the year, everyone on the professional staff whose work revenue contribution to the firm is not commission-based, but rather some vague definition of "performance based" will be accumulating a list of all the deals that they worked on throughout the year and the commensurate revenue that the sum total of all of those deals contributed to the overall bottom line of the firm financially. The Department Heads usually fight for their share of the bonus pool from the Directors allotting it and then they distribute it accordingly amongst the members of their departments. Salaries are considered to be "low" on Wall Street to ensure that professional employees put out and THEN and only THEN and IF and ONLY IF the firm does well overall, are bonuses to be considered and allocated. Somewhere in the Techboom of the 1990's bonuses began to be seen as more of a "God-given annual right" than earned compensation by the "Big Swinging Dicks," of Wall Street, as they were referred to in Michael Lewis' 1985 book. As the new millennium came and Y2K was something that they had "overcome" and not merely survived like everyone else, bonuses and other perks began to get even more astronomical. In fact, it spread to executives in other industries who prior, were not compensated on the same level. Neither shareholders' value nor dividends, nor consumer pricing was put first, it was ME FIRST from the BABY BOOM GENERATION and it doesn't matter what it does to anyone below me on the compensation food chain. The attitude was feed by greed, immorality and what seemed like endlessly profitably deals and increasing firm stock price. What was underlying all this increase in "supposed capitalization" of these firms which allowed them to do more deals, purchase more risky assets for their own portfolios and continuing supremely compensating, not only executives, but all the professional staff, was the BIG LIE OF DERIVATIVE PRODUCTS. Many on the capital markets desks of these firms knew the truth of the lies underlying these pooled assets, but lived on the high horse in denial and milked that cow until it dried up. Now, the American taxpayer has been bailing out the industry since last year.

Unfortunately, despite cries from the American public and the New York State Attorney General and some members of the Financial Services Committee, evidently with TARP, there weren't safeguards put in place to prohibit the practice of giving bonuses during bad times. Meaning, ok, the firm hasn't performed, therefore there will be no bonus pool and hence no individual executive bonuses from the bonus pool. Makes sense to anyone with a head on their shoulders, except the good men of Wall Street have still maintained this sickening attitude of entitlement that has allowed them once again to overcompensate themselves by paying themselves bonuses for driving companies into the ground. Directors of these firms came begging to Capital Hill for bailouts, claiming that if they didn't get TARP (bailout #1) they would be bankrupt tomorrow and tens of thousands of employees would be spilling onto the unemployment rolls. Both Bear Stearns and Merrill Lynch poured millions out to employees in bonuses while they bankrupted the companies over their own greed. AIG employees have yet to pay for their trip to California and spa services they received. For bonuses to be paid to any investment or commercial bank employee in this financial environment is clearly WRONG. There is no spectrum of grey within which to debate the merits, it simply is WRONG. SINFUL. GREEDY. NOT RIGHT. Add your own adjectives. It is black and white, no firm who has accepted funds from taxpayer bailout number one or number two should be paying employees any compensation other than salaries. Perquisites should have been terminated entirely in the conditions of the loan documents in order to get these funds. If the best and the brightest were running the Treasury last year, why didn't they protect American taxpayer interests better? Congress and our President need to intervene on behalf of the American Shareholder/taxpayer immediately to stop these payouts however they have too.

Kimberly Wilcox