Wall Street pay is so extreme, so removed from what nearly everyone else thinks is within the boundaries of reasonable compensation, that one can be jaded by the continued talk of sky-high bonuses. Even when the absurdity of the pay practices are pointed out — as it is in a new report from the New York attorney general’s office:
..even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks’ financial performance.
— some may still shrug. Wall Street will be Wall Street.
Yet the madness of the bonus culture is starkly revealed by a chart in the AG’s report that details how the nine banks that received TARP funds paid out bonuses in 2008. The huge amounts of bonus money in some cases dwarfed firms’ profits. And it’s not just the size of the payouts, but how extensive they were.
For example, Merrill Lynch paid bonuses of more than $3 million to 149 employees; bonuses of more than $1 million to 696 employees. This from a firm that lost nearly a half-million dollars per employee in 2008.
The zombie bank that is Citigroup paid bonuses of more than $3 million to 124 employees; more than $2 million to 176 employees, and more than $1 million to 738 employees. And presumbably that does not include the $100 million compensation being sought by a Citi trader.