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Econwatch
January 11, 2010 7:28 AM

U.S. Banks Brace for Bonus Backlash

By
Sean Alfano
Topics
Compensation
(iStockphoto)
As bonus season begins on Wall Street, U.S. banks are bracing for the inevitable public backlash against multimillion dollar executive compensation as the nation struggles to climb out of an economic crisis.

Despite the recession, financial firms had a blockbuster year. For some chief executives and top producers, they could be getting bonuses with six, seven or even eight figures, reports CBS News correspondent Jeff Glor.

Service Employees International Union head Andy Stern tells the Financial Times of the bonuses: "They (banks) backed the truck up to Fort Knox in broad daylight. They emptied it out, we rescued them and they get $150 billion in bonuses."

Another union official tells FT that executives were using banks "like ATMs."

According to the Wall Street Journal, banks are telling employees that the bonuses will contain more stocks and less cash in effort to show the public it is sensitive to their anger amid the economic crisis. The employees, in turn, the Journal reports, are concerned that less cash will restrict their abilities to take care of household expenses such as mortgage payments. ($)

"I don't think it's just whining," one person at a Wall Street firm told the Journal. "There are legitimate liquidity issues that people have."

This week, the financial crisis inquiry commission begins hearings with the nation's top bank executives expected to attend. The commission was created by congress to investigate the near-collapse of the financial system," Glor reports.

Former New York Gov. Elior Spitzer blasted U.S. banks, telling CBS' "The Early Show" Monday their profits were built solely on taxpayer-funded bailouts. "They (banks) believe they are entitled to these crazy sums of money," Spitzer said. "It is inequitable, it is wrong."

Of the major investment banks to receive bailout money, Goldman Sachs is likely to get the lion's share of scrutiny thanks to its soaring profits and list of alumni holding key government positions.

One analyst tells the Journal he expects Goldman Sachs to dole out $18 billion in bonuses, a 64 percent increase from 2008.

Goldman Sachs is trying to buffer itself from criticism by considering telling its top-earners they have to donate a certain percentage of its earnings to charity, The New York Times reports. However, the Times reports Goldman employees could make an average of almost $600,000.

Goldman Sachs declined to talk to both the Times and the Journal for their stories.

In any case, White House Economic Adviser Christina Romer fired the administration's latest shot toward Wall Street, saying Sunday that the bonuses were "ridiculous," adding that it will "offend the American people."

Add a Comment See all 32 Comments
by GreatDepression January 11, 2010 5:16 PM EST
Using the H1B and L1 Visas program, we can InSource the best CEOs from China and India at a much cheaper cost than hiring a maid.
Reply to this comment
by AnnieDanny January 11, 2010 4:51 PM EST
In Britain apparently there is a cap on Bankers salaries. Some kind of controls, apparently to prevent this kind of financial drain from happening to the banks. That's what I read somewhere. Obviously, from all the reports we read in the news, it doesn't seem we can trust our USA banks to make ethical decisions. I don't see that our government has done a thing to change the circumstances that caused the financial collapse a year ago. And then they wonder why the economy is still not improving? We didn't learn anything from our mistakes? Seems as if all our blunders are still blundering along the same as ever.
Reply to this comment
by rightbehind January 11, 2010 4:29 PM EST
wallstreet is economic canabilism
Reply to this comment
by thesevenveils January 11, 2010 4:27 PM EST
There should be a public outcry over this ridiculous practice. The bank executives should be made to get paid to do their job, and not a penny more just like the minimum wage workers.
Their bonuses are coming out of our pockets!
Reply to this comment
by quapawsix January 11, 2010 4:13 PM EST
Here's your sign!...........
Chart 1 reveals the linear connection between the Rothschilds and the Bank of England, and the London
banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank
stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York,
J. P. Morgan Co., and Kuhn,Loeb & Co. were the firms which set up the Jekyll Island Conference at
which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the
plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal
Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal
Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or
business related) owning controlling stock in existing banks (such as in New York City) caused those
banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and
text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the
12 regional Federal Reserve Banks show this same family control.
N.M. Rothschild , London - Bank of England
______________________________________
| |
| J. Henry Schroder
| Banking | Corp.
| |
Brown, Shipley - Morgan Grenfell - Lazard - |
& Company & Company Brothers |
| | | |
--------------------| -------| | |
| | | | | |
Alex Brown - Brown Bros. - Lord Mantagu - Morgan et Cie -- Lazard ---|
& Son | Harriman Norman | Paris Bros |
| | / | N.Y. |
| | | | | |
| Governor, Bank | J.P. Morgan Co -- Lazard ---|
| of England / N.Y. Morgan Freres |
| 1924-1938 / Guaranty Co. Paris |
| / Morgan Stanley Co. | /
| / | \Schroder Bank
| / | Hamburg/Berlin
| / Drexel & Company /
| / Philadelphia /
| / /
| / Lord Airlie
| / /
| / M. M. Warburg Chmn J. Henry Schroder
| | Hamburg --------- marr. Virginia F. Ryan
| | | grand-daughter of Otto
| | | Kahn of Kuhn Loeb Co.
| | |
| | |
Lehman Brothers N.Y -------------- Kuhn Loeb Co. N. Y.
| | --------------------------
<
| | |
Reply to this comment
by inventagod January 11, 2010 4:00 PM EST
C'mon... These are BANKERS!

These are the guys with the black hats, who ride into the sunset with YOUR money...
Reply to this comment
by U_S_Drug_Addict January 11, 2010 2:42 PM EST
cancelling all credit cards.
paying cash only....
Reply to this comment
by curse914 January 11, 2010 1:08 PM EST
by jd2408 January 11, 2010 12:49 PM EST
Join the revolt. Move your money to a community bank or credit union. Show the big banks there is something we, the taxpayers, can do. Pass the word to friends and family. Together we can make a difference.

[][][][][][]

Already ahead of you. I have been with a Credit Union since I had my first job.
Reply to this comment
by curse914 January 11, 2010 1:06 PM EST
by victumofspin January 11, 2010 11:16 AM EST
Receive a check from a Chase customer and Chase will charge you $6 to get the money due you. Banks raise fees on everything they instituted that would streamline save money (cut jobs), now the fees and charges. Then oh they need a bailout, their behavior but they blame the customer (their victums). Now more fees more bonus for them. Fees higher, more fees. Chase sits on mortgages to be renegotiated, I hear horror stories of what they are doing. Forced foreclosures, delayed paper work on renegotiation of rates now down and they still have not processed and keep stalling on people that need their loan re negotiated. Now more bonuses.
We need and alternative. They are the worse place to save money, can't get and decent interest rate, even before the economic problems they had a major role in.
Working class taxpayer's are still on the get they list.

[][][][][][][][]

Chase is also a job outsourcer. This institution needs to be dissolved.
Reply to this comment
by jd2408 January 11, 2010 12:49 PM EST
Join the revolt. Move your money to a community bank or credit union. Show the big banks there is something we, the taxpayers, can do. Pass the word to friends and family. Together we can make a difference.
Reply to this comment
by nowhiningallowed January 11, 2010 3:29 PM EST
The community banks have been the ones failing in recent months. Not many credit unions left either.
by jd2408 January 11, 2010 4:01 PM EST
nowhiningallowed: I would give you the web site to check the ratings on banks but when I post it they delete it. Anyway, check the rating of the bank and go with a bank with rating A or B. Check the ratings on the credit unions also. Make sure they are federally insured. There are good solid community banks and credit unions out there. Remember these big banks would have been bankrupt if not for the bailout. We need to force their downsizing ! There are credit unions everywhere in the north east, not sure where you are.
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