I ran across this article today and thought I would pass it along to the rest of the forum.
http://money.cnn.com/2009/10/16/news/newsmakers/b…
It is basically Goldman Sachs' CEO taking a stance on the looming 'bonus backlash' that will surely surface in the coming months. I like the fact that Blankfein is being proactive on this issue in an attempt to curb some of the impending negative publicity.
Whether the bonuses are appropriate is up to personal opinion (though I would imagine that most members see them as essential). I see them as necessary, first because I intend to work in the industry for the foreseeable future and would like to feel justly compensated, and second because this is the way it has been for many years, which has set a precedent. Changing things now will only make people leave the industry and ultimately hamper the efforts to pull our country out of this recession.
I surmise that most of the general public haven't the slightest idea of what actually occurs on Wall Street and that if they actually have someone, besides the liberal media, sort of explaining to them how necessary the functions of these firms are, they might be less inclined to moan about the compensation structure.
Of course Jesus himself couldn't convince some of these people that WS isn't evil but there is no helping those folks. What are your opinions? Do you feel it's worthwhile for people, such as Blankfein, to publicly speak on these topics or will their words just fall on deaf-ears?
Regards
I say that's bullshit. The financial landscape has changed. Huge bonuses are not essential.
Wall street should pay analsts (for example) 60k + and ~15-20% bonus. If analysts dont like that, then they can quit! I am sure there are plenty of people out there willing to take the job and give it a go.
And if no one is willing to work 100+ hours for that money, then the employeeing banks should re adjust and change the work culture. Employee more people to tackle the workload, pay them less. The banking culture has always been considered absurd.
Moreover, the bonus practice has not been in place for that many years, relative to the financial market history. The crazy bonuses have only really been a recent phenomenon during the 2002-07 unprecedented boom times.
My MD told me that the bonuses are ridiculous. When he started banking, he was being paid half that of what his assistant was being paid. And it will take him three, four years to catch up. Only the best of the bankers pull the crazy bonuses. Most fail or find out banking is just not what they expected and quit.
Do you really think that the financial industry will pull the U.S. out of recession!??!? Yeah Bofa and Citi are well on track for doing so. The U.S. financial industry is completely oversized in terms of its share of the US GDP. It would have been much more beneficial, if some of those folks you fear leaving the industry now would not have been there in the first place.
By the way do not take my name as indicative for my personal opinion. In fact, I do have some banking experience. But I think that your line of argumentation is not very convincing. Because (high) bonuses were the standard for the past couple of years should not mean that compensation should stay this way. As you can read everywhere "the world is changing". Most bankers would not have a dime left of their unvested stock options without state money.
Regards
Sooo...are you a banker? Judging by your opinion I would say no, but considering you mentioned your "MD" I assume maybe you are.
If in fact you are, when was the last time you accepted your bonus?
Given your statements, hopefully never. Seeing how you don't feel they are necessary and that you echo your MD's sentiment that the bonuses are ridiculous I imagine you just stamp 'void' on your check and toss it in the shredder. Seem accurate? Or are you saying that you are willing to work the excessive amount of hours required of analysts but prefer not to get paid for it?
Like I alluded to in my other posts...
//www.wallstreetoasis.com/blog/bonus-backlash-begins#comment-187765
...your employment model doesn't hold water. People fail to realize the cost in employing someone. Could you imagine if you were to double or triple the number of lower level bankers you have in your IBD. The amount of additional physical space you would need to house these additional workers, the resources (computers, copiers, etc), the additional money you would spend with regards to payroll taxes, retirement benefits, health care, life insurance, etc are all cost prohibitive and just another reason banks are willing to pay good salaries and good bonuses for intelligent, motivated individuals.
Also, lets not forget that bonuses are, for the most part, not in the control of the individual analyst. The bonuses received are subject to the strength of the market as it pertains to the coverage their banks provide and the strength of their bank's deal flow and despite the weak deal flow of the last couple years it seems that few bankers leave at 5 pm on a regular basis, if ever. I don't know any person, whom is educated on the subject, that doesn't feel that banker's earn their bonus money, even at the top.
Regards
Well all i can say is that you are a naive little boy still in college.
If you do indeed realise your "hope" of going into the industry, then hopefully your thoughts will mature a little more and be able to see the reality.
Atm, you are just an eager, naive, ignorant college brat who have this glorified image of bankers and bonuses. Nothing I say here will change your blind ignorance. I suggest you first make it into the industry then reflect back on this.
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