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A few months ago, I offered my services — only half facetiously — to British Petroleum as CEO after I had read about and watched bits of Tony Hayward’s testimony before Congress. He’d acted like the Sergeant Schultz character (I know nothing, nothing!) on the old sitcom Hogan’s Heroes; I figured I could do at least as good a job as Hayward for a lot less money. Win-win all the way around for everyone!
The Sergeant Schultz defense seems to be fairly common among CEOs and upper management for many companies, even though they are paid to be aware of what is going on. I would imagine that there are many of us among the millions of long term un and underemployed who could do the jobs of CEOs and so-called Masters of the Universe and be not only more honest in our dealings with others but also more empathetic for those who are struggling.
Instead, we get to see Goldman Sachs CEO Lloyd Blankfein’s salary and other compensation jump again in 2010:
The firm’s board granted restricted stock valued at $12.6 million to Mr. Blankfein and other senior executives, including Gary D. Cohn, the firm’s president. The board also approved a new annual base salary of $2 million for its chief executive, up from $600,000. Mr. Cohn and others will see their base salaries increase to $1.85 million, according to the filing on Friday.
With his previous salary of $600,000, Mr. Blankfein’s 2010 compensation comes to $13.2 million. Senior executives often receive part of their compensation in cash, but Goldman did not release details on this component of Mr. Blankfein’s compensation.
Surprisingly, this does not sit well with all corners of the business world. This is from a Fortune Mag (via CNN blog):
How might you compensate management for a year in which profits plunged, you spent $550 million of shareholder money to settle a fraud investigation and your stock ended up more or less exactly where it started (see chart, right)?
You might be tempted to nix raises or withhold bonuses to send a responsible message about linking pay to performance. But if so, you wouldn’t be Goldman Sachs (GS).
It just had the year described above – and responded by tripling everyone’s base salary while boosting bonuses by 40%. Is this a great country or what?
Turns out, Bank of America is doing similar and is also not winning fans for doing so (via Wall Street Journal):
Bank of America Corp. intends to give some investment bankers a greater share of their bonuses in cash, the latest Wall Street compensation move roiling banking chieftains as they meet in Davos, Switzerland.
Last year the highest-paid bankers at the nation’s largest bank by assets received as little as 5% of their payout in cash. Now bankers and traders making more than $5 million are getting as much as 30% of their 2010 compensation in cash and at least 70% in deferred stock, according to people familiar with the situation. Some could see a stock award of as much as 80% and 20% in cash.
Of course, the bankers love to send mixed messages. On Wednesday (January 26), the NY Times DealBook had this from the World Economic Forum’s meetings:
DAVOS, Switzerland — After being on the defensive for the last two years, there were signs that bankers attending the World Economic Forum here were pushing back more assertively against attempts by regulators to cramp their style.
At one of the opening panels on Wednesday, top executives from Goldman Sachs and Standard Chartered warned that new restrictions on their businesses are either irrelevant or threaten to hurt economic growth.
Then yesterday (January 29), Reuters offered this walk back:
(Reuters) – Top bankers adopted a softer tone after high-level meetings at the World Economic Forum on Saturday, thanking governments for shoring up the financial system in the hope of avoiding tighter regulation.
But, in a reminder of the problems banks still face after absorbing billions of dollars of taxpayers’ money in bailouts, French Finance Minister Christine Lagarde said financiers needed to show real thanks by changing their behavior.
Given all the whining by bankers about not getting bonuses or nobody loving them anymore or just generally being unhappy:
According to Carol Graham of Brookings, author of “The Paradox of Happy Peasants and Miserable Millionaires,” there is no shortage of what she calls “frustrated achievers.” Stewart Wallis of the New Economics Foundation in Britain, said that the key to well-being is not just wealth but “flourishing and feeling valued.”
Jeffrey Sachs of Columbia University said America’s economic system had corrupted the soul of the country by engineering excess: over-eating, excessive television-watching and material consumption now dominated the lives of millions of Americans. “We designed a kind of society that is designed for addiction,” he said.
A few months ago, there was a study published about money buying happiness but only up to a point.
With every doubling of income, people tended to say they were more and more satisfied with their lives on a 10-point scale – a pattern that continued for household incomes well above $120,000.
But when well-being was determined by asking a series of questions about the previous day – whether people had experienced a lot of enjoyment, laughter, smiling, anger, stress, worry – income mattered only up to about $75,000. After that, more money didn’t seem to buy more – or less – happiness.
Seems to me the best way for everybody to be happy is for the bankers to relinquish their multi-million dollar bonuses, help provide jobs to all us millions of long term un and underemployed and cap all wages at or near $75,000 per year. Then the bankers can stop whining about how no one loves them and we can all have our Rodney King moment.
No, I’m not going to hold my breath on this happening either.
And because I can:
Cross posted from Just a Small Town Country Boy
24 Comments
Deductible? Seems not to be:
“I would imagine that there are many of us among the millions of long term un and underemployed who could do the jobs of CEOs and so-called Masters of the Universe and be not only more honest in our dealings with others but also more empathetic for those who are struggling.”
Of course we can! I can’t tell you how many CEO’s I’ve had the opportunity to meet and talk with that are in reality dumb as dirt. In fact, most of them know absolutely NOTHING about the operation just that they think their ideas are bigger.
Then you add that to the normal way they come into those positions and it is a big ol frat party dressed in suits!
I invite, in fact DARE, Mr. Blankfein to have a look at the photographs of the ruined “houses of riches” in Tunisia. Your time is coming, Blankfein, count on it!
As the last two years have shown, the bankers will never stop whining.
Even after they’ve passed their estates to Muffy and Junior tax-free,
they’ll be whining.
Look at it this way, the more they are paid, the more they have to pay in taxes. Now if the guy gets 13 million and if our system was not run by crooks, we’d have that guy pay social security taxes on all that money. If we made the millionaire pay the same percentage on his social security as the guy at poverty level, then we’d have no problem with social security. “Why didn’t I think of that?” he asked when he was cutting those messy entitlements like social securities. One should always go back to Upton Sinclair’s Jungle to get a look into the future. We’re heading there – faster than you think and that’s why the few are stacking up the dough to pay their Blackwater guards to keep back the teeming masses. Good Night and Good Luck.
With that base salary, they should be able to cut those bonuses to something much more reasonable, like $600,000 (maximum).
So, we know he can be bought….now we’re just talking about the price.
Hedge fund owner John Paulsen: On April 16, 2010, the New York Times reported Paulson had earned $1 billion in 2007, $2 billion in 2008, and $2.3 billion in 2009 from fees received from his hedge fund by betting against subprime mortgages long before the term became well known.[28 His total worth around $15 billion.
PS. I love your BP offer….they should have taken you up on that.
Maybe these MOTUs know their banks are in trouble and would rather have cash at this point.
I’m not sure but shouldn’t the lowest bidder get the job of destorying Amerika? I would have done it for 1 million and I would have been open to offers;)
The question is,Is there anyone who couldn’t do a better job than these self appointed MOTU? All you have to do is not crash the economy which isn’t setting the excellence bar all that high.
In any other job if you screw up spectacularly,for instance if you’re an electrician and burn down the building you’re working in, you get fired, you probably get sued, and you definitely lose business if word gets around. These MOTU burn down the world economy and then demand and get big taxpayer financed bonuses for doing it.
Where can the rest of us sign up for that deal?
Thanks Dakaine01,
the situation with the banks is outrageous and just keeps getting worse.
On a lighter note, the QE bears have another video up. This time they took a pretty humorous crack at the banks, bank bonuses and Tim Geithner.
http://www.youtube.com/watch?v=yipV_pK6HXw
”
Q: So after all these bailouts, did the banks stop the forclosures?
No.
Q: Did they give the mortgages?
No.
Q: Did they do anything at all?
They paid themselves big bonuses.
R: That does not sound like a prudent use of the American peoples money.
When you constantly get the bailouts, you don’t care about the prudence.
”
Good job, dakine. Congrats on the front page!
I think the bankers are secret communists that want to keep ****ing with us until we have a real communist revolution.
They’re showing the evils of unchecked greed every other day while the insurance companies parade their abuses right in front of our faces proving that private insurance alone can’t work while the mining/gas/oil people spill and collapse their mines by ignoring safety laws.
I think the only way the secret commies could be more blatant is gathering together under a billion dollar portrait of lenin and screaming into a camera “How badly do we have to treat you ****ing people to get you off your asses and revolt!?”
The parasitic elite know the collapse is coming, so they’re sucking us dry as fast as they can before they retreat to their gated fortresses for the duration. They’re comfortable they can befuddle and bullshit everyone for three more years until there is no functioning Federal government to hold them accountable for the massive fraud and theft.
The unchecked greed is escalating and if you wear a suit and commit fraud, you do not go to jail. Laws are for the “little people” and not for the elites. Did anyone notice the people at the State Dinner recently(Blankfein & Elites)?
They(our Politicians, Banksters,and CEO’s) are stashing our money in foreign banks and ready to get out of Dodge, when the gig is up.
Brazil, Dubai, etc., are the retirements havens for our Suited Criminals.
Isn’t Capitalism great$$$$$$$
All these CEOs tend to go to the “right” schools and then slime their way up the ladder; many are already “connected” before they’re born. The fable that they all work “so hard” is just rightwing propoganda shoveled out by RushGlenn to their credulous minions, who lap it up and feel satisfied by this fiction.
Some CEOs are probably intelligent enough and some may even make a difference in how the company is run and is profitable. But over the past 3 decades – as shareholder – I’ve watched the same old same old very very few be appointed to Board after Board after Board after Board. It doesn’t take a genius to recognize the old boys/girls network at work. These corp. Boards are made up solely of the fat cats; they ensure that they all get these giant salaries & perks & stock options; and then they also pump out the *complete fiction* that, for the company to remain “competitive,” they *have to* pay insanely greedy nutty salaries, OR ELSE they simply won’t get *someone good* or qualified. It’s the biggest load of hogwash to come down the pike in many a day.
Shareholders and workers, alike, are being ripped off by this criminal system, and these CROOKS further rig the system so that, if they *fired* for rank incompetency, they leave with some insane golden parachute, which further rips off the workers and shareholders.
Hence you see LAZY entitled incompetent crooks like Carly Fiorina, who literally slept her way to the top, caused Lucent Technologies to founder and fail, got kicked upstairs to Hewlett-Packard, where she behaved like an entitled prima donna, off-shored over 30,000 US workers’ jobs, and was so imbecilically incompetent, that Hewlett and Packard heirs *had* to come back and FIRE Fiorina. Of course, Fiorina got zillions in her pay-out. Then Fiorina tries to *buy* a Senate seat in CA, so that she can get another fairly well-paid job for which she is in no way capable, but hey: cha-ching!! Fiorina can then get on the public dole for life and collect her highly paid public pension and the best health benefits that taxpayers/serfs can buy her.
I dislike Barbara Boxer, but thank gawd citizens didn’t get *stuck* paying for the likes of Fiorina for life.
All of these fat cats are paid far too much; abolutely none of them *earn* what they make. The workers are being squeezed to ensure that these greed-heads can rip us all off. It’s just insane. Why republican voters believe this rip off is “good,” is way beyond my comprehension.
Thanks for the informative post. This kind of info needs to be out there for more to see and learn about.
Rant off….
They whine because they can! I really think these greedy sh*ts feel so incredibly entitled that they are completely divorced from reality and totally buy into and believe their propoganda. they forget the propoganda is just fiction to fool the serfs and not “real.”
I agree, but just btw: Soc Sec is *not* and “entitlement.” It is NOT welfare. Soc Sec is a pension system that YOU and I paid into. It is like a bank account or an annuity that YOU and I contribute to. My bank account is not an entitlement, nor is Soc Sec.
And don’t forget that, thanks to Democrat Chuck Schumer, the Hedge Funders only pay 15% on the zillions they make on their Hedge funds. These are not taxed like income; they’re taxed like capital gains. More for these greed-heads, and less for the rest of the nation.
Oh, but, btw: we just *have to* cut Soc Sec because it’s causing the nation to go into debt. (not really snark)…
Heh… well done. Some days I think like that, too.
… something like that, or so it would seem.
Thanks for the informative post, as always. It never ceases to amaze me how many citizens are quite willing for these outrageous greed-heads to behave this way; think it’s ok for these sh*ts to rip us off this way; and “settle” for a game of “let’s get all incendiary with rage at the dreaded eeevul LIEbruls who are lazy welfare slackers encouraging Mexicans to come to the USA illegally.”