Category — bonuses

Wall Street should nix their bonus programs this year.  There’s simply no way to justify them given their performance and hundreds of billions in taxpayer funded bailouts.  For example:

Citigroup, which received $25 billion from the government last month, has reported $26 billion in expenses for compensation and benefits in the first nine months of 2008, up 4 percent from the same period a year ago. The New York-based bank has reported four consecutive quarterly losses.

Compensation up 4% year over year with 4 straight quarterly loses.  Sounds like the employees and management at Citigroup are really sharing in the pain.

Sadly, nobody on Wall Street understands that bonuses should be linked to performance:

At Goldman Sachs (GS) the figure was $11.4 billion, Morgan Stanley (MS) $10.73 billion, JPMorgan (JPM) $6.53 billion and Merrill Lynch (MER) $11.7 billion. At Morgan Stanley, the amount put aside for staff compensation also grew in the last quarter to the end of August by 3% to $3.7 billion.

With the exception of JP Morgan, these firms are down huge this year.  I have no idea what makes any of them think they deserve bonuses.  They’re basically looting taxpayer money that was suppose to be used to make loans and shore up balance sheets.

Ordinarily, I adhere to free market principles, but clearly these compensation schemes have no grounding in reality.  Therefore, I hope somebody (Congress) steps in and puts a stop to it.  You simply can’t let these pigs continue feeding at the trough given the wreckage left in their wake.