Eat What You Kill
by David Atkins
Wall Street likes to defend its lavish bonuses as justification for top performance, and necessary for keeping the best talent. So how do they explain this?
While Wall Street’s profits were battered and beaten last year, workers’ bonuses were merely bruised.
The total payouts to finance industry employees in New York are forecast to drop only 14 percent during this bonus season, according to a report issued on Wednesday by the state comptroller, Thomas P. DiNapoli. By comparison, profits plunged, falling 51 percent.
“The securities industry, which is a critical component of the economies of New York City and New York State, faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms,” Mr. DiNapoli said in a statement
Eat what you kill, indeed.
The funniest part has to be this:
At the same time, overall compensation on Wall Street remains high relative to the rest of New York. In 2010, the average pay, including bonuses, in the securities industry in New York City hit $361,180. (Figures were not yet available for 2011). At that level, Wall Street paychecks are 5.5 times higher than those in the rest of the private sector.
Compensation has posed a dilemma at Wall Street firms. The issue has proved a lightning rod for politicians and critics who contend that the industry’s pay packages are too high.
But some banks defend their practices, arguing that compensation is critical to retaining and rewarding employees. Jamie Dimon, the chief executive of JPMorgan Chase, said at an investor conference on Tuesday that even in tough times, he would not pay his employees less than the going rate.
“We are going to pay competitively,” Mr. Dimon told a roomful of analysts and investors at the conference. “We need top talent. You cannot run these businesses with second-rate talent.”
If crashing the world economy and shrinking profits by half isn’t second-rate talent, what is? If it’s not clear by now that this is a pack of greedy parasites enriching themselves and their friends at our expense, it never will be. Maybe if we forced them to shop at government grocery stores and undergo drug tests for cocaine use it might be clearer what a drain they are on real, hard-working Americans.
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