Inside views on the jobs market
The bright side of financial turmoil
Who says it’s all gloom and doom on Wall Street? Sure, job cuts are fast and furious these days, but the deepening financial crisis is bringing about some interesting unintended consquences. Time magazine reports that although the government bailout caps the salaries of top executives, it may actually prop up the bonuses of rank and file bankers.
True, those bonuses are substantially lower than they would’ve been had the markets not imploded in recent weeks — but not nearly as low as one might expect.
Compensation consultant Alan Johnson predicts the average managing director at an investment bank will be on the receiving end of a $625,000 bonus this year, with top bankers earning as much as $1 million. That may be a tough pill to swallow for the taxpayers footing the bailout bill, but some argue that bankers shouldn’t be penalized for their firm’s bad decisions.
Banks already recognize the importance of rewarding newly acquired talent. Bank of America last week offered retention packages to more than 15,000 Merill brokers in a bid to stave off defections. Only time will tell if it works.
Do Wall Street payouts need to be reined in? Share your thoughts below in the comments section.