Bailout Bonuses For Investment Bank Execs

(CBS)  One of the recipients of the taxpayer bailout is still struggling. CitiGroup said Monday it plans to cut 53,000 jobs by early next year, one of the largest layoffs ever by an American corporation.

And what about the big bonuses Wall Street executives count on at this time of year?

Despite massive layoffs, dismal earnings reports, and a rescue check from the federal government, CBS News correspondent Priya David reports Wall Street investment firms still plan to hand out roughly $14 billion in year-end bonuses.

Now the industry leader, Goldman Sachs, has announced its top seven executives will forgo bonuses, stock and option awards this year, compensation packages totaling more than $300 million. Banking giant UBS followed suit.

"They've received billions of dollars from the public and to receive bonuses in the face of all that would have appeared to be piggish," said compensation consultant David Schmidt of James F. Reda & Associates.

Schmidt says Goldman Sachs was under tremendous pressure to cut bonuses, but it may just be a drop in the bucket compared to smaller bonuses thousands of rank-and-file employees get.

In light of today's job cuts, New York Attorney General Andrew Cuomo is calling on CitiGroup and AIG executives to drop their bonuses too.

"People are upset, and with good cause," Cuomo said. "You have people who have seen their life savings go out the window, and they did nothing wrong here.

"They were then called on for a trillion dollars to bailout the institutions that caused the problem in the first place."

More than excess, analysts say it's the compensation structure that's partly to blame for Wall Street's meltdown, a system that encouraged risky behavior to get bonuses.

"The more money you can bring in to the firm, the more you're gonna receive in terms of bonus," Schmidt said. "For those who are making those deals, if for some reason those deals don't work out, the personal repercussions are probably not what they should be."

Analysts say these executive bonus cuts are mostly a public relations maneuver, a rare case on Wall Street where taking less means more.

[king_daniel_]

if the auto swine created better cars with less dependancy on oil and gas and less smog for us to smoke they would sell more cars worldwide...however they opted to jump in bed with the oil companies.....with designs that get worse mileage than tanks.....our government shouldn''t bail them out....haliburton should...since it was them that paid the board to say that 14 miles a gallon is as good as it gets.....i hope they all lose their jobs and a company thats not in an orgy with the conspiracy artists comes to power with something that applies technology under the hood where it should be...there was a crack head in texas that took parts from his refrigerater and was getting sixty miles a gallon....there is a man in oklahoma, named steven myers i believe, that has a steam engine he built in his garage that is amazing, find it on youtube.... if an average person can make a million dollar design look stupid; it only makes sense they can''t make any money.....

[frogleg2]

Most Americans probably look upon the wall street bonus system askance and with some humor . Can one be sure which executive preformed well and which did not. If is simply about how much money flowed in from your efforts then a bonus for super performers is in line. Including a balance of ethics and dollar producing gives us a different set of values to measure performance. Of course looking at it from a judgmental, subjective viewpoint most feel that everyone on Wall Street should get a bag of coal.

The noble act of giving up these bonuses is probably a mix of corporate guilt and good press. A lot of people have lost their life savings and took a fatal hit to their pensions, perhaps they should be given a year end bonus. There is now way to estimate the damage at this point but I feel it is an obscene act to reward the people who brought down the economy and mismanaged us into a dark corner and super sized their earnings. One of the things I learned as a child is that once a bully took away your little red wagon he most likely would never give in back. The federal government is going to bail out the captains of industry with billions then I think the captains of industry should be required to bail out the average American with haste and strict guidelines and not hoard the money for times of higher profit. I say give them bags of coal to be redeemed for dollars after they make a signifiant contribution to the recovery of the terminally ill economy.

[washeyp]

Since it is the norm to give year end bonus, I have no problem with that BUT the tax rate on such bonus MUST be 110% for those earning over$150,000.00 per annum......

[mstrogan61]

Top Ten reasons why we should bail out the Car Companies.
1.So the CEO''s could buy a neck tie to hang themselves with.
2.So Joe the plumber and Jill the Health care Provider, can take it up the pipe 2x instead of 1x.
3.Americans won''t have to work just let the Mexicans do it.
4.to keep the big wigs out of the welfare line.
5.All car BUYERS start a business to recieve a BAILOUT.
6.No Americans has to pay bills except for their car payment.
7.So car companys can move their companies to Mexico and receive a Bail out from the United States.
8.Sorry Kids can''t eat because we have to support the Car Companies.
9.Lower gas prices.
10.Great Credit for Americans.

[mstrogan61]

you are right she is saying the goverment is raping the people that need help to help the big wigs

[joethedumber]

bush=bail out banks, leave individuals to rot.
Listen how the right wing neocons call people"Stupid" for being it debt. And they dont attack the trillion dollar corporate bail out already given.

[sherie6918]

Criminal!! Any company, bank, Wall Street firm, that takes part in the federal bailout program should not be allowed to pay out bonus payments or stock options!!!! This is something that continues to squeeze employees and tax payers. Pay to CEOs should be more closely monitored. If the company is not making a profit, management should not recieve payouts!!!!!!!!

[fduran2848]

hmmmm.....my company lost money this year therefor I get no bonus....I guess I''m working for the wrong company.....

[lilly1232]

'''' .. don''''t shift shapes & toggle virtual & realtime & travel eternitys at speeds of thoughts, you don''''t have infinite divergence with infinite wishes come true & infinite lines resolution with infinite fast refresh .. you''''re all just little dressed diligent sober celibate intransient adult subsistance soldiet bits of dust magically erupted in depths of endless oblivion .. not infinite oceans of lazy naked lusty dopey transient kid subsistance farmet eternal storyboards swimming & drifting infinite oceans of eternal storyboards .. ''''



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Posted by autumn987 at 11:56 AM : Nov 18, 2008

Huh? does anyone have a clue as to what she said, or who she said it too????????????

[nothappyatall]

reports Wall Street investment firms still plan to hand out roughly $14 billion in year-end bonuses. "

What did you expect? remember who PUSHED big for this- GW BUSH and his crime cartel of course.