No bonuses for bank workers, just raises
May 27th 2009 12:30PM
Updated Dec 4th 2009 11:17AM
"Key employees"? Let me guess, these are the same key employees that helped these banks swirl around the veritable toilet bowl drain of the economic downturn, only to be saved by the government? Perhaps I'm jaded, but I don't think shareholders (or taxpayers, for that matter) should be supporting any move to bend over backwards to "retain" the investment bankers at banks that got us all into this mess. If these banks want to reward their employees for the pressures they're under, they should be required to first completely pay back the TARP funds they've received.
I mean, let's get real here. Morgan Stanley has received $10 million in TARP funds, and they feel now is the time to up the base pay for their investment bankers? Citigroup received $25 million in TARP funds. At least Citi has had the sense to keep its mouth shut for now about its plans, although as I noted above that could change any second.
But wait, I have a better idea: At this point, the U.S. governgment is a major stakeholder in each of these firms. So why doesn't President Obama come out and say, fine, these banks are free to issue whatever raises they want -- as long as their TARP loans are paid back in full first. After all, he's had no problem issuing such decrees to Detroit. Why not to Wall Street?
Maybe I'm letting my outrage get the better of me, but I just don't understand where the investment banks get off sneaking around Obama's decree of no more bonuses simply by upping base pay. This must be dealt with swiftly, or these banks risk destroying any goodwill that remained after the near collapse of the American financial system. Will anything like my solution actually happen? I doubt it, but I guess there is always hope that some sort of common sense will pierce the conscience of the big banks and our government.