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Wall Street banks in $70bn staff payout

Posted By admin On October 18, 2008 @ 4:50 am In Featured Stories | Comments Disabled

Simon Bowers
London Guardian [1]
Saturday, Oct 18, 2008

Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government’s cash has been poured in on the condition that excessive executive pay would be curbed.

Pay plans for bankers have been disclosed in recent corporate statements. Pressure on the US firms to review preparations for annual bonuses increased yesterday when Germany’s Deutsche Bank said many of its leading traders would join Josef Ackermann, its chief executive, in waiving millions of euros in annual payouts.

(Article continues below)

Wall Street banks in $70bn staff payout  161008pptv1 [2]

The sums that continue to be spent by Wall Street firms on payroll, payoffs and, most controversially, bonuses appear to bear no relation to the losses incurred by investors in the banks. Shares in Citigroup and Goldman Sachs have declined by more than 45% since the start of the year. Merrill Lynch and Morgan Stanley have fallen by more than 60%. JP MorganChase fell 6.4% and Lehman Brothers has collapsed.

At one point last week the Morgan Stanley $10.7bn pay pot for the year to date was greater than the entire stock market value of the business. In effect, staff, on receiving their remuneration, could club together and buy the bank.

In the first nine months of the year Citigroup, which employs thousands of staff in the UK, accrued $25.9bn for salaries and bonuses, an increase on the previous year of 4%. Earlier this week the bank accepted a $25bn investment by the US government as part of its bail-out plan.

Full article here [1]


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URLs in this post:

[1] London Guardian : http://www.guardian.co.uk/business/2008/oct/17/executivesalaries-banking

[2] Image: http://www.prisonplanet.tv/subscribe.html

[3] Goldman to make record bonus payout: http://www.prisonplanet.com/goldman-to-make-record-bonus-payout.html

[4] Why It’s Not Inevitable That Other Wall Street Banks Are Going To Get Dinged: http://www.prisonplanet.com/why-its-not-inevitable-that-other-wall-street-banks-are-going-to-get-dinged.html

[5] Wall Street Seeing Goldman in Rare Reversal With Morgan Stanley: http://www.prisonplanet.com/wall-street-seeing-goldman-in-rare-reversal-with-morgan-stanley.html

[6] QE4? The Big Wall Street Banks Are Already Complaining That QE3 Is Not Enough: http://www.prisonplanet.com/qe4-the-big-wall-street-banks-are-already-complaining-that-qe3-is-not-enough.html

[7] The Big Wall Street Banks Are Already Trying To Buy The 2012 Election: http://www.prisonplanet.com/the-big-wall-street-banks-are-already-trying-to-buy-the-2012-election.html

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