Mad at Goldman Sachs Bonuses? Blame Yourself
When Goldman Sachs announced last week that its swelling bonus pool for top performers had reached a record $23 billion -- about $700,00 for each of its 32,000 employees -- the chorus started anew over excessive compensation on Wall Street.
Goldman's sop that it would pay $200 million to charity didn't do much to silence the critics on the weekend news shows.
"The bonuses are offensive," Obama adviser David Axelrod complained on ABC's This Week. After all, it's only been a year since American taxpayers wrote Goldman a whopping $10 billion bailout check, which it has since paid back.
What, you are surprised by this pay day? Goldman hasn't lied to you about its intentions. You just haven't been listening.
That's the opinion of Roger Martin, Dean of the Rotman School of Management at the University of Toronto in Canada. Noting that the firm is once again riding high on a resurgent market, Martin writes on his Harvard Business Publishing post, The Goldman Bonuses: I'm Shocked, Shocked:
"Life is good again and it is time for the bonuses to flow, as they always have... So this is not new at all. The order of priority is: Goldman bankers first, the external shareholders second, and everybody else last. This is not a secret and has never been."His point: Goldman is a 140-year-old professional services firm that has always run its business by attracting and then rewarding star performers. No one has said they should stop doing that. Goldman's business model has been rewarded by shareholders for years and years. And when it got in trouble last year, the government, using taxpayer funds, bailed out the firm without asking for many structural or other changes. It was back to the status quo.
Were you outraged over this latest round of banker bonuses? Do you agree with Martin that the fault lies with shareholders, legislators and taxpayers?