Shareholders in the securities industry are having the worst year since 2002, however Wall Street is paying a record $38 Billion in bonuses this year.
Goldman’s record earnings and gains at Morgan Stanley and Lehman mean all the New York-based firms will be forced to pay more in a year when all but Goldman lost more than 20 percent of their market value, said Charles Geisst, finance professor at Manhattan College in Riverdale, New York.
The industry’s bonuses are larger than the gross domestic products of Sri Lanka, Lebanon or Bulgaria. The average $201,500 bonus is more than four times the $48,201 median household income in the U.S. last year, according to U.S. Census Bureau statistics.
Is this fair? As long as the boards or the companies’ shareholders don’t complain. Those big bonuses may just be fair compensation for the hard work and long hours that anyone involved in the financial industry puts in.
The size of the payouts is a concern given how badly the shares of most securities firms have performed this year, said Fitzpatrick of Johnson Asset Management.
“They’re paid very handsomely in good times because they’re supposed to take a hit in bad times,” Fitzpatrick said. “Performance has dwindled this year, and I think they should feel that.”
I agree! What better than to give big bonuses to already handsome compensation packages. Let’s not forget the nice severance pay given to the guys on their way out. I wonder what the new CEOs will get when they turn things around. None of this makes sense to me.
Don’t forget higher education. The highest paid university presidents are getting paid close to 3 million! With the cost of education out-pacing inflation, and with job placement(decent paying jobs) remaining mediocre, one must wonder if higher education is worth it. Sure, financial institutions are hiring like mad, promising great benefits to top achievers. Please, take a closer look at the turnover rate of those places. If you are not connected to wealthy people, its damn near impossible to make it.
Getting a steady job is hard for new graduates, especially if they have student loans to cover. But don’t tell the universities that.
I wonder if anyone looked into possible collusion between big lenders (i.e. Sallie Mae) and universities nationwide. Is it possible to see an education recession? These days, nothing is impossible.