The Wall Street bailout bill has some bankers grinning: Their bonuses should have fallen by 70 percent this year.
Instead, thanks to the taxpayers, those big payouts could slip by just 40 percent, according to a Time magazine report.
"Year-end pay on Wall Street will be higher than it would have been had it not been for the government and mergers," Alan Johnson, a compensation consultant, told the magazine.
"You would expect it to be down much more."
Johnson separately told Forbes that he expects the bonus pool to end up between $19.9 billion to $23 billion, down substantially from the $33.2 billion paid out last year.
According to Johnson’s numbers, a managing director at an investment bank can expect a $625,000 bonus, down from $1.1 million last year.
Meanwhile, a novice bond trader is going to see $170,000 hit the bank account in December.
"It's not the government's money directly, but in the case of Morgan Stanley and Goldman Sachs, they were facing a severe crunch," analyst Brad Hintz at Sanford Bernstein told Time.
"Had it not been for the government's help in refinancing their debt they may not have had the cash to pay bonuses."
Deutsche Bank already has said it would cancel bonuses this year. JPMorgan Chase says its bonuses will be down 30 percent to 50 percent.
American International Group, recipient of $85 billion and counting in federal loans and stung by ill-timed executive junkets, says it will “claw back” any bonuses in violation of state law, including $54 million scheduled for two former company leaders.
Congress is considering action on the matter.
House Financial Services Committee Chairman Barney Frank (D-MA) has called for a freeze on Wall Street bonuses.
And former presidential candidate and House member Dennis Kucinich (D-Ohio) was angered by a report in The Guardian that tallied bonuses for the first three quarters at $70 billion — fully 10 percent of the original bailout bill’s cost.
"When Congress placed restrictions on excessive executive pay, it had no intention of permitting business as usual with respect to bonus structures," he told The Guardian.
"It would add insult to injury to ask taxpayers not only to bail out a firm, but to pay for bonuses as well.”
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