Did Wall Street bonuses bone us?

Not in the same way.

 

Thanks for posting. I found it very insightful, especially for someone with little knowledge of the subject matter.

 

Here's a look outside Wall Street and it's multi-million dollar bonuses for failure.

Bank CEO gives away $60 million in bonus! RHe rewarded employees after he made millions of dollars instead taking TARP to reward them.


http://www.miamiherald.com/460/story/904842.html


Miami banker gives $60 million of his own to employees

BY MARTHA BRANNIGAN
mbrannigan@MiamiHerald.com

Lots of bosses say they value their employees. Some even mean it.

And then there's Leonard Abess Jr.

After selling a majority stake in Miami-based City National Bancshares last November, all he did was take $60 million of the proceeds -- $60 million out of his own pocket -- and hand it to his tellers, bookkeepers, clerks, everyone on the payroll. All 399 workers on the staff received bonuses, and he even tracked down 72 former employees so they could share in the windfall.

For longtime employees, the bonus -- based on years of service -- amounted to tens of thousands of dollars, and in some cases, more than $100,000.

At a time when financial titans are being paraded before Congress to explain how they blew billions on executives' bonuses even as they received a taxpayer bailout, the big-hearted banker's selfless deed stands out.

''I retired seven years ago, and all of a sudden I get this wonderful letter and phone call,'' said Evelyn J. Budde, who spent 43 years at City National Bank of Florida, rising to vice president.

''I was shocked,'' said William Perry. In 43 ½ the years at City National, he climbed from janitor to vice president. Like many longtime City National employees, he forged an unbreakable bond with the bank that continued into retirement. Perry returns regularly for the annual employees' dinner.

Abess didn't publicize what he had done. He didn't even show up at the bank to bask in his employees' gratitude on the day the bonus envelopes were distributed. He was inundated with letters soon afterward.

Asked later what motivated him, Abess said he had long dreamed of a way to reward employees. He had been thinking of creating an employee stock option plan before he decided to sell the bank.

''Those people who joined me and stayed with me at the bank with no promise of equity -- I always thought some day I'm going to surprise them,'' he said. ``I sure as heck don't need [the money].''

SPANISH BUYER

In exchange for an 83 percent stake in the business, the Spanish bank Caja Madrid paid $927 million in November. Abess retained a minority share and is still the board chairman and chief executive officer at City National.

Even before the sale, Abess wasn't hurting for money. He bought his 11.8-acre, $23 million estate in Miami's Cliff Hammocks neighborhood from actor Sylvester Stallone in 1999.

Abess' father, Leonard L. Abess, founded City National in 1946 with Baron de Hirsch Meyer as one of the first postwar commercial banks in the region. Abess Jr. started his career in the bank's print shop, which made forms and documents. Working his way up the ladder gave him an appreciation for the role that employees play in the success of an enterprise.

''I saw that if the president doesn't come to work, it's not a big deal,'' he said. ``But if the tellers don't show up, it's a serious problem.''

Many people presume that Abess inherited the bank from his father, but he didn't.

In fact, in true Miami fashion, the bank has a colorful history. City National was sold in the early 1980s to an investment group that, in turn, resold it to Colombian coffee magnate Alberto Duque.

The dapper and charming Duque was the toast of Miami -- until he was convicted of bilking two dozen Miami banks out of about $108 million in connection with his coffee business.

Duque went to federal prison -- he eventually fled the country from a halfway house -- and City National went on the block in bankruptcy court.

n 1985, the younger Abess bought majority control in the bankruptcy proceedings for $21 million -- all of it borrowed, he says -- and he later acquired the rest from about 200 investors for about $6 million. Under his hand, the bank grew from $400 million in assets and seven offices to $2.75 billion in assets and 18 offices.

Sharing the wealth with staffers came naturally. Abess and his wife, Jayne, have long been big contributors to local organizations, such as the Greater Miami Jewish Federation and Mount Sinai Medical Center. In 2006, the Abesses gave $5 million to the University of Miami to promote environmental studies.

But he also wanted to reach out to his staff. ''I wonder if I did enough,'' he recently mused.

''I knew some of these people since I was 7 years old. I didn't feel right getting the money myself,'' said Abess, who was concerned that their 401(k) plans had taken a beating in the downdraft on Wall Street last year.

SPREADING THE WORD

To prepare employees, Abess made an online video just before the merger was completed and explained in it that a windfall was coming soon. He also wanted to make sure that people realized it was a one-time bonus -- and certainly not severance pay or a nudge for them to move on.

Three days later, about 2 p.m. Nov. 7, a Friday, a handful of senior employees fanned out throughout the bank's offices to dole out vouchers that detailed the sums deposited in their payroll accounts. A handful of senior executives got separate payouts.

''We expected a bonus, but the type we received -- our mouths are still open,'' said Carleatha E. Barbary, a 39-year veteran who runs the One Biscayne Tower branch.

Geneva Lawson, a 72-year-old safety-deposit clerk who has spent 51 years with City National, including a stint as Abess' boss in the print shop, plans to buy a new car -- and to save a bit.

Workers were provided with financial counseling and special high-rate certificates of deposit at City National.

''It was like a lottery, only better,'' Virginia C. Dunn, managing senior vice president, said of the gift. ``Because it came from someone's heart.'