Should bankers get bigger bonuses?

October 17, 2014

As F. Scott Fitzgerald was famously kind-of quoted, “The rich are different than you and me.”

Morgan Stanley reported strong third-quarter earnings today, up 12 percent to $8.91 billion in quarterly revenue, while rival Goldman Sachs yesterday reported an increase of 25 percent to $8.39 billion.

As this Reuters interactive shows, the share price for both investment banks healthily beat the S&P 500, with Morgan Stanley’s earnings per share coming in at $0.84 and Goldman’s boasting an EPS of $4.69.

If there’s any bad news—and bad is a relative term here—it’s for bankers at the two financial titans, as both credit restraint in compensation (aka, flat bonuses) for helping earnings growth. Reuters’ Lauren Tara LaCapra reports that similar changes to bonuses are taking place across Wall Street. Still, Goldman estimated its average compensation per employee at $320,000 or the first nine months of the year.

Somehow I don’t think Joe Sixpack—or F. Scott Fitzgerald, for that matter–are shedding any tears.


JulyAugustSeptember0510%Goldman SachsMorgan StanleyS&P 500$5.00SELECT:REVENUENET INCOMEBASIC EPSSep ’13Dec ’13Mar ’14Jun ’14Sep ’14Goldman SachsMorgan Stanley

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If it weren’t for the Wall Street banks, all that asset inflation that the Federal Reserve creates by increasing the money supply, would never show up in the Gross National Product numbers. But thanks to Wall Street’s activities, that asset inflation is converted into “growth”.

Posted by nose2066 | Report as abusive

Bankers should get no bonuses. Are they some special type of class of people? They only use other people’s money.

Posted by WestFlorida | Report as abusive