Bonuses return with a vengeance on Wall Street
24 Feb 2010
With Wall Street employees genetically programmed with STM (short term memory), the pain of the global financial crisis of 2008 have long been forgotten as Wall Street bonuses jumped 17 per cent last year, to an estimated $20.3 billion, according to a report released yesterday by the New York State comptroller.
In a scathing report released yesterday, Thomas DiNapoli, the New York State Comptroller, said that Wall Street bonuses paid to New York City securities industry employees rose by 17 per cent to $20.3 billion in 2009.
Total compensation at the largest securities firms grew even faster and industry profits could exceed an unprecedented $55 billion in 2009, nearly three times greater than the previous all-time record. In 2008, the industry lost a record $42.6 billion with the collapse of the financial markets.
New York's crusading Attorney-General Andrew Cuomo, after conducting a nine-month investigation into compensation practices in the American banking system mismanagement, released a report last July titled, No Rhyme Or Reason: The Heads I Win, Tails You Lose, in wich he alleged that nearly a dozen banks paid out more than $32.6 billion in bonuses in 2008 even as they received $175 billion in taxpayer's money. (See: US banks paid $ 32.6 billion in bonuses: Andrew Cuomo)
In his analysis of the 2008 bonuses and earnings paid at the nine TARP recipients, two firms, Citigroup and Merrill Lynch suffered massive losses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion in bonuses and Merrill paid $3.6 billion in bonuses.
Despite their combined loss of $54 billion, the two banks collectively paid out nearly $9 billion in bonuses and then received government bailouts totaling $55 billion.
