Do it because you like it

New York Times: "The provision is intended to discourage employees from making short-sighted decisions by tying their comp. to the bank's long-term performance." Think this trend will catch on else where? Is the whole comp. structure going under complete alteration?

i do think this will be the trend going forward. it's the policy at other banks too...restricted cash and claw back. the actual cash paid out this year is going to have an extremely low ceiling. it is a very dangerous time for people who need a minimum bonus of x to cover their expenses.

unless you're really passionate about it, consider your options

How exactly do they want to do this claw back policy? There should be a bunch of lawsuits attached to that, no? Darn...I should have applied for law school afterall...

there will be lawsuits unquestionably. don't look at them to succeed. the same way the courts looked the other way when bear shareholders tried to sue, they'll look the other way now. if it's viewed as for the good of the economy and necessary, courts can be surprisingly flexible.

good to hear you made it through the 10% massacre jimbo (assuming you're at MS)...i thought they'd shut down a lot of their prop groups, but apparently you're still kickin.

personally, i think that these clawbacks are a good thing. in some way, shape, or form, senior executives need to get the partnership mentality back into wall street firms, where the capital being risked is their capital. you think the goldman partners wouldve risked all their money on stuff they didnt understand back in the 80s because some trader said it was a good idea?

"good to hear you made it through the 10% massacre jimbo (assuming you're at MS)...i thought they'd shut down a lot of their prop groups, but apparently you're still kickin. "

i am not at ms. this is the bonus style for most firms going forward as far as i am aware

Any suggested readings on the subject of what you call the "partnership mentality"? I was debating with one of my professors last week on this exact subject, she seems to think that protecting shareholders interest keeps execs conservative and personal capital investment by execs pushes firms to increase risk. Which clearly isn't the case, my argument was based on logic with no references for backup. Any suggestions?

pr nightmare X-(

JimboB/c we sure as hell aint getting paid anytime soon.

http://dealbook.blogs.nytimes.com/2008/12/08/morgan-stanley-executives-…

time for a new career boys.

I don't know. This is a bit funny. "Do it because you like it" is absolutely right. If you're in it solely for the money, say buh bye.

what pays as much??

1) Elite prostitution 2) Starting your own business

You would think that by the time a bull market heats up enough for bonuses to get big, the market will be about crash and your stuff will get clawed back. I wouldn't be surprised if hedge fund and private equity LPs demanded that kind of arrangement either. Is the Emperors Club VIP still hiring?

it's all about short term risk for employees, and all about long term risk for employers...this is one of the very few solutions where you can link both present and future risks. a clawback linked to the general perf of stocks or company's end year results shoudlnt be that complicated to implement actually.

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Has anyone else considered that the clawbacks will become a new profit center for firms?

They're basically going to set up a new department in each firm called "Blame Assignment". It will be this department's function to figure out who fucked up and punish them accordingly. My guess is, part of this department's bonus compensation will be based on the amount of money "clawed back", providing them with a huge incentive to look for ways to get their filthy dick-beaters on YOUR bonus money.

Paranoia? Perhaps. Just remember: people are never reliable, but money makes them predictable.