US banks paid billions in bonuses despite crisis
Thousands of top traders and bankers on Wall Street were awarded huge bonuses and pay packages last year, even as their employers were battered by the financial crisis.india Updated: Jul 31, 2009 21:55 IST
Thousands of top traders and bankers on Wall Street were awarded huge bonuses and pay packages last year, even as their employers were battered by the financial crisis.
Nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008, according to a report released Thursday by Andrew M. Cuomo, the New York attorney general.’
At Goldman Sachs, 200 people shared nearly $1 billion, and at Morgan Stanley, $577 million was shared by 101 people, the report says.
The report is certain to intensify the growing debate over how, and how much, Wall Street bankers should be paid.
In January, President Obama called financial institutions “shameful” for giving themselves nearly $20 billion in bonuses as the economy was faltering and the government was spending billions to bail out financial institutions. On Friday, the House of Representatives may vote on a bill that would order bank regulators to restrict “inappropriate or imprudently risky” pay packages at larger banks.
Cuomo, who for months has criticised the companies over pay, asked: “If the bank lost money, where do you get the money to pay the bonus?” All the banks named in the report declined to comment.
Cuomo’s stance — that compensation for every employee in a financial firm should rise and fall in line with the company’s overall results — is not shared on Wall Street.
At Morgan Stanley, for example, compensation last year was more than seven times as large as the bank’s profit. In 2004 and 2005, when the stock markets were doing well, Morgan Stanley spent only two times its profits on compensation.