$500k is 2.5% of $20 million. That seems comparable to what an individual real estate agent would make on the same deal. And what bonus would you give if a person lost trillions?
Hey you cannot blame them though! If I could take over control of all the financial companies with no responsibility for them failing I would do it for sure!
Wrong. The $20 million in fees is around 2-5% of the total deal value of the associated transactions. So your comparison is apples to oranges. Nice try.
On a serious note, one of the major drivers of this financial crisis was the delinking of performance from compensation. This is a huge problem and as we are seeing, the fall out is spreading far beyond the individual companies that are responsible for the mess. The government needs to take action to address this and it needs to apply to more than just companies that are taking bail out funds. I'm not sure exactly how the mechanism should be structured to promote a linkage between performance and compensation, but off the top of my head something along the lines of significant tax incentives to companies that put in place compensation models that reward good performance and seriously punish bad performance, might be worth a look.
I think they will work smarter to ensure that their company doesn't self destruct so that they have to take bail out money. In 2007 they were engaged in the policies which brought about the mess they are in now. They didn't deserve the bonuses then.
What did JPMC do that made them take the bailout money? They bought bad assets of failing companies to help the government then was forced to take money now are being dictated terms. WTF?
You are no longer qualified to discuss this issue. It has been explained the way the law as written in other threads, and you have shown that you don't understand it at all. I thought this was supposed to be your strong area. It's very disappointing indeed.
Nothing. And all they have to do is tell the shareholders, "we believe we have good leadership, and this is what we want to pay our executives" and if they are OK with it, they get to keep paying them. Why are people so against the owners of these companies having a say in executive pay? They do own the company, after all. Do you really believe executives should not be accountable to shareholders?
If Chinese companies want to pay these sh_theads multimillion dollar pre-paid bonuses to flush their financial sector down the toilet, I say have at it.
Guys Guys guys, link WASHINGTON — President Barack Obama today imposed $500,000 caps on senior executive pay for the most distressed financial institutions receiving federal bailout money, saying Americans are upset with “executives being rewarded for failure.”
The board and the shareholders already have this power. If they wanted to cut salary to these guys to 500K they could.
LOL, if you think the shareholder franchise is effective either a) at all or b) at limiting executive pay. . . . you need to have your head examined.
The board does - the shareholders don't, except through the roundabout process of trying to kick out boardmembers. But regardless, now it just works in reverse - if the guys want to be paid more than $500K, they have to get it approved by the people who own the company. Why is that so horrible?
http://www.marketwatch.com/news/sto...C2-F8C9-4D4F-BF89-507AC694C4B5}&dist=hplatest In possibly related news, Goldman Sachs announced that they want to pay back the Treasury for their bailout, but don't currently have enough money, and don't really know where the money is going to come from.
As you are a recently laid-off individual I know this discussion is hard for you, therefore I excuse you from further comment. As an aside, I saw [former] Citi employees today out on the sidewalk in tears carrying cardboard boxes in midtown. I guess they must have been the ones who bought derivative financial instruments.
