Category Archives: pay

Bonuses are Large Because They’re Unpredictable

Mike at Rortybomb explains that the whole reason why Wall Street bonuses are so big is that there’s a non-zero chance that they won’t be paid: I’ve heard it from several people that the argument for the bonus is “we … Continue reading

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Whining Executive of the Day, AIG Financial Products Edition

Executives at AIG Financial Products are not happy bunnies these days, and they’re starting to make their views public. Jake DeSantis, for instance, published his resignation letter as a NYT op-ed. But Paul Harriman and his wife, Jan Ellen Harriman, … Continue reading

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Recessionwire, in Theory and Practice

Congratulations to my former colleagues Laura Rich and Sara Clemence for getting the great-looking Recessionwire up and running — and for snagging some very valuable NYT real estate, as well. This is my favorite bit from the NYT article: … Continue reading

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Banker Pay: Salmon vs Barnett

I just had this IM exchange with Megan Barnett: Felix Salmon: Hi Megan, I see you’re attacking the cap on bankers’ pay, while I think it’s a good idea. Megan Barnett: Yes, it’s true. We finally disagree on something. Felix … Continue reading

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Why Capping Pay is Likely to Work

The NYT wheels out an executive-compensation expert today, to predictably pour cold water on the Obama administration’s plans to cap top executives’ pay at half a million bucks a year: “That is pretty draconian — $500,000 is not a lot … Continue reading

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When Bonuses Aren’t Discretionary

It’s becoming increasingly clear that if there’s a problem in the general economy with sticky wages — employers being unable to cut costs by cutting wages, and thereby going bust — then on Wall Street the problem is the other … Continue reading

Posted in banking, pay | 2 Comments

Bonus Scandals Begin to Emerge

The issue of Wall Street bonuses in general, and Merrill Lynch’s bonuses in particular, is only just beginning to heat up. The NYT is scandalized today that bonuses in New York are going to total $18.4 billion — the sixth-largest … Continue reading

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Adding Up the White House Pay Freeze

The Washington Post reckons that Barack Obama has saved the nation about $443,000 by freezing the salaries of any staffers on six-figure salaries. But the real number is surely much less than that — and could be as low as … Continue reading

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Remunerating Managerial Talent

Robert Frank is quite certain about executive pay: Why not limit executive pay? The problem is that although every company wants a talented chief executive, there are only so many to go around. Relative salaries guide job choices… If C.E.O. … Continue reading

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Thain’s Bonus

A bunch of investment-bank CEOs are dangling from a rising hot-air balloon. Dick Fuld, as we know, held on for too long, and by the time he finally let go, there was too far to fall, and he died. Jimmy … Continue reading

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Finance Salaries: A Reply

Free Exchange responds to my declaration that finance-sector salaries should be slashed: The problem, however, is with self-selection. The most talented people in finance would be the ones to go. Even in the worst labour market talent is in demand. … Continue reading

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Pay Bankers Much Less

Andrew Ross Sorkin is worried about what happens if you don’t pay bankers enough money: The trick, of course, is to dole out enough rewards to keep executives working, and working hard, but not to dole out too much… Citigroup … Continue reading

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The Return of the $70 Per Hour Meme

You might expect it from right-leaning commentators like Will Wilkinson. You wouldn’t expect it from someone like Mark Perry, who lives in Flint, Michigan. And you certainly wouldn’t expect to see it in the New York Times, from the likes … Continue reading

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Unsympathetic Demographic of the Day: HENRYs

Do you pity the HENRYs ("high earners, not rich yet")? If you’re Shawn Tully you do. In an astonishing feat of reporting, he’s discovered that if you ask people whether they feel rich, especially if they work hard and have … Continue reading

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The Income Inequality Game

Dan Goldstein, the brother of fashion blogger Lauren, has an interesting web project of his own, trying to work out how well people understand inequality in the US. Go give it a twirl; the more people who take the interactive … Continue reading

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Remuneration Datapoint of the Day, Risk-Free Edition

You know that "trader" who got a $2.1 million bonus in 2006 but is suing for another $150,000 on top? Well, he’s not really a trader at all: the FT says that he "has worked for the inter-dealer broking arm … Continue reading

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Remuneration Datapoint of the Day

From Gretchen Morgenson’s article on AIG Financial Products, the 377-person unit which brought down a 116,000-employee behemoth: Over all, A.I.G. Financial Products paid its employees $3.56 billion during the last seven years.

Posted in derivatives, insurance, pay | 1 Comment

$250,000 per Year Counts as Rich

Slate’s Moneybox column is mostly home to Dan Gross, but occasionally other people write for it too. Back in May, it was fine for Sam Grobart and Tara Siegel Bernard to write that "for a family of four living in … Continue reading

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Central Banker Salary Datapoint of the Day

Last year, the Bank of England paid about £520,000 to Mervyn King: a salary of £290,653 and pension contributions of about £230,000. This year, King isn’t eligible for pension contributions, since he’s 60 years old now and that’s the age … Continue reading

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The Wealth of Randy Baker

Let’s say you’re the CFO of a company which is worth more than $65 a share. You get 200,000 options to buy shares at $30 apiece, and the shares are trading at $52. You could sell the shares immediately and … Continue reading

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$200,000 a Year Makes You Rich

Of the 116 million households in the United States, just 4 million are fortunate enough to earn more than $200,000 per year. This top 3.5% of the US population has a level of wealth and comfort that would be almost … Continue reading

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Why We Need Experts, Executive Pay Edition

Headline from a press release which arrived in my inbox Wednesday evening: “Golden Coffin Pay” is Not Pay-for-Performance Says Executive Compensation Expert Glad that’s cleared up, then. No mention is made of the front-page WSJ article which appeared on Tuesday … Continue reading

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The Economics of Rick Mishkin

This, from Brad DeLong, seems relevant, somehow, in the wake of Rick Mishkin’s resignation from the board of governors of the Federal Reserve: In other disciplines to leave your university because another offers to pay you more entails personal humiliation … Continue reading

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How Often Would You Like to be Paid?

If you’re poor, you’re generally acutely aware of exactly how much money you have at any given time, and that amount is generally very low. Andrew Goodman-Bacon and Leslie McGranahan have a paper out now on the Earned Income Tax … Continue reading

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How to Curb CEO Pay

John Cassidy has got me thinking on executive pay. Cassidy is angry at the sums paid to CEOs, and he’s urging us all to "go ahead and get mad" in an attempt to curb the worst excesses. It’s not the … Continue reading

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