'Wall Street pays out billions in record compensation'
Financial institutions on Wall Street are preparing to pay a record 144 billion dollars in compensation and benefits, according to a study published today in the Wall Street Journal.business Updated: Oct 12, 2010 15:29 IST
Financial institutions on Wall Street are preparing to pay a record 144 billion dollars in compensation and benefits, according to a study published on Tuesday in the Wall Street Journal.
The payout, covering bonuses, premiums and stock options for the firm's executives and employees, is a four-per cent raise over the previous record 139 billion dollars that was handed over in 2009, said the financial daily.
The study, which covers 35 Wall Street firms -- including banks, investment banks, hedge funds and money managing groups -- found that 29 of the institutions were also expected to see revenue rise by three per cent, from 433 to 448 billion dollars.
The 2010 profit for the firms of some 61 billion dollars is still a 20 per cent decline on the 82 billion dollars in 2006 -- despite in that time compensation at the institutions soared 23 per cent, according to the Journal.
Wall Street banks and funds have already come under withering criticism for their actions during the 2008 financial crisis and faced the fury of the US public for paying out huge bonuses even though some were propped up by taxpayer funds to keep afloat.
In June US authorities announced guidelines aimed at countering pay and bonus practices blamed for the excessive risk taking that fueled the global financial crisis.
The rules, however, did not prohibit any specific forms of payment for incentive compensation or establish mandatory compensation levels or caps.