Some on Wall Street Panicking, Whining About Not Getting a Bonus This Year
A new class of Wall Street types has emerged this year. Referred to as the "Zeros," these workers are accustomed to receiving bonuses that effectively double their base pay, but this year they're out of luck on the on the bonus front. Unsurprisingly, they're none too happy about the situation -- never mind the fact that many of them have received substantial increases in their base pay.
The New York Timeshas the story:
In some ways, a zero bonus should not come as a surprise to many bankers. As a result of the 2008 financial crisis, Wall Street firms like Goldman Sachs and banks like Citigroup raised base pay substantially in 2009 and 2010. They were seeking to placate regulators who had argued that bonuses based on performance encouraged excessive risk...
Even though employees will receive roughly the same amount of money, the psychological blow of not getting a bonus is substantial, especially in a Wall Street culture that has long equated success and prestige with bonus size. So there are sure to be plenty of long faces on employees across the financial sector who have come to expect a bonus on top of their base pay.
I think I speak for most of America when I say, "Oh, wahhh." Not every person who works on Wall Street was responsible for our nation's financial collapse, of course, so in some respects I understand the argument that individual workers shouldn't be punished for the sins of their employers. But it sounds like these people aren't being punished at all! They're receiving the same amount of money as they did in the past -- a handsome sum, it must be said -- and they're complaining about the "psychological blow" of not receiving that money in a big chunk at the end of the year.
Indeed, the Timesconfirms that there is plenty of dough to go around for Wall Street's workers:
In terms of overall profit, Wall Street is on track for one of its best years ever, although it will trail 2009, which was pumped up by federal bailout money and the rebound from the financial crisis.
In the first three quarters of the year, Wall Street earned $21.4 billion, putting it on track to easily outpace 2006, when the economy was booming, and well ahead of the New York City government’s initial estimate of $20.6 billion for profit in all of 2010.
This year, Wall Street’s five biggest firms have put aside nearly $90 billion for bonuses.