Despite Crisis, Wall Street Pay Rockets Higher
The more things change, the more they stay the same.
Despite the public outrage generated by stratospheric Wall Street compensation packages during the financial crisis, those packages are on the rise again — up 23 percent from last year alone.
Generous bonus pools at bailed out companies such as AIG led to promises of reform by Wall Street firms. They said they would stop rewarding executives for moves that boost short-term profits but can create huge harm in the long term.
But with banks’ earnings rebounding in a major way, they’re back to handing out money to employees like mad.
Major banks are now on pace to pay their workers as much as the glory days of 2005 to 2007 — or even more, The Washington Post reports.
The six biggest banks have allocated $74 billion for compensation so far this year, 23 percent higher than last year.
Congress isn’t pleased.
“It strengthens our commitment to getting legislation passed,” House Financial Services Committee Chairman Barney Frank, D-Mass., told The Washington Post. "The amounts are troubling."
President Obama sounded troubled too at his news conference Wednesday.
"With respect to compensation, I'd like to think that people would feel a little remorse and feel embarrassed and would not get million-dollar or multimillion-dollar bonuses," he said.
Even Morgan Stanley, which is still losing money, is raising salaries.
"The war for talent seems to be as hot as ever. I'm not sure that's sustainable," Colm Kelleher, the firm's chief financial officer, told Bloomberg.
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