A salesman for Company X - which makes widgets - has a quota of $1 million in sales per year. His compensation is $50,000 per year base salary plus 10% of everything he makes over quota. The salesman busts his rear all year, working the phones and hopping on airplanes. He does well, bringing in $2 million in sales, doubling his quota. His compensation is $150,000 that year. Additionally, those on his work support team - back office, administration, etc - would also likely share in that success. I suspect few in America would have a problem with that scenario.
But what if Company X lost money that year because top management decided to get into the business of selling "whatsits." The whatsits didn't sell, and in fact did damage to the company overall. Now let's add that Company X was not only suffering massively but whose overall business is seen important to the American economy and it received Federal assistance to keep operating. Should the salesman who did his job selling widgets and beat his quota not be paid his bonus? If you say he shouldn't, you probably want to stop reading.
Now let's turn that to Wall Street. This will be one of the least popular stories I have written but it needs to be said: the President is wrong on the issue of Wall Street bonus payments and when he says Wall Street should have "know better." Just as we should not lump any group of disparate individuals together to make a political point, neither should the President and his cabinet lump "Wall Street" into one, singular group of financial evildoers.
The President is wrong on the bonus issue for the following reasons:
Most of that $20 billion dollar bonus figure thrown around Washington goes to the rank and file and not the top executives
Many banks factored into this bonus pool did not take TARP money
Most of the bonuses are paid as a percentage of sales and profits, and there are many on the Street who had nothing to do with the economic collapse and made money for their firm
Most CEOs have canceled their bonuses (or been fired)
Bonus payments have already fallen by nearly half
As equity shareholders in many of the big banks, Americans now have an economic incentive to keep the best workers at the firms they now partially own
Thursday the President once again attacked Wall Street, calling bonuses "shameful" and making other strong remarks (video) about financial industry pay. While no one can or will defend money-losing CEOs giving themselves multimillion dollar payouts, it is important to differentiate between the C-suite top executives and the majority of those working in finance. Let's put aside the rhetoric and examine the reality.
First, Despite the big headline numbers Washington likes to throw around, bonuses are already way down. From the office of New York State Comptroller Thomas DiNapoli:
Cash bonuses paid by Wall Street firms to their New York City employees declined by 44 percent in 2008 in response to record losses suffered by the securities industry. DiNapoli noted that the federal Troubled Asset Relief Program (TARP), which infused billions of dollars into the financial system, helped prevent more institutions from failing. TARP placed restrictions on bonuses for top executives and many have voluntarily forgone bonuses, but it did not impose limitations for lower-level employees.
Next, what many in Washington (and across America) forget is that most people on Wall Street are, at the core, salespeople. Additionally, the majority of "Wall Street" - despite politicians who like to lump the hundreds of thousands of financial industry workers into a single group of "them" - had nothing to do with what is happening right now with the economy or credit crisis. They are a diverse group who do thousands of different jobs across a variety of industries. Stock brokers, commodities traders, investment bankers, and the hundreds of other specialized careers in finance have little to do with each other, much less be able to be harvested into some "group" to be singled out for misdeeds. The President likes to use phrases such as "Wall Street folks" when making critical comments about the state of the economy. That is no better than saying something to the effect of "those folks in California" should've "known better" than to buy homes when the market was clearly in a bubble.
What is also misunderstood is that many on the Street make a majority of their pay through a bonus. This is not just the highest paid investment bankers and traders. It is also the secretaries, administrative staff, and hundreds of other positions that support the company. Guaranteed salaries among much of this group can actually be relatively low, and there are many positions where more than half of compensation comes in the form of a once a year payout.
Outside the upper echelon of management most highly paid financial professionals merely have a product, sell it, and make a percentage of the revenue and profit. If an oil trader makes $10 million dollars for his firm, he expects a percentage of that profit to come back as his pay. If he loses money he won't get anything but his base salary and probably a pink slip. Bankers are the same way. They help companies buy and sell each other. If they do deals, they get paid. If not, they don't. Despite the mystery surrounding much of finance, most Wall Street workers are not that different than other sales driven industries. Those who peddle software, cars, toothpaste or the thousands of other products sold around America each day face the same reality: sell, make money for the company or face getting the boot. Most lawyers by the way, the previous occupation of most on Capitol Hill, operate the same way.
Right now you are no doubt saying I am wrong (if you are still reading at all). After all, you say, Wall Street helped create the crisis and are now asking for taxpayer money and using some of that to pay their workers. That's wrong, you say, and so we should penalize the lot of them by getting rid of their "shameful" bonuses. Let's say then for arguments sake that you are right and I am wrong. Let's use that same logic to another end.
If the idea is that industries who 1) helped promote the economic collapse through 2) over zealous and some say greedy behavior and 3) who are now getting Federal help should not be able to receive the pay they earned that may have been related to the economic crisis, shouldn't it also hold true then that others, and not just Wall Street, face the same penalty?
If you answered yes, then should we ask all the others related to and involved in the housing boom and economic malaise to "know better" and give up all future commissions on what they sell? Should realtors not receive their sales commission because home prices are down 30% in some areas, the market was clearly in a bubble that should have been obvious to many, and now their industry is receiving Federal assistance through the Treasurys buying of mortgage related assets? What of the auto industry? GM and Chrysler accepted Federal money to keep themselves in business. Does this mean that the car dealer who sells a GM or Chrysler product should "know better" and refuse to accept a commission on the sale because the car companies got themselves into trouble and needed rescue?
The answer on both of the above examples is "of course not." The majority of realtors, mortgage brokers, car salesmen and others associated with at-risk industries had nothing to do with the global crisis we now face. Wall Street, despite what many want to believe right now, is much the same. As with most companies, the big decisions - like begging for TARP money - are made at the top, by a small group. Many of the people I know on the Street also believe many of their top management needs to be fired.
I am not a Wall Street apologist. There are those on Wall Street who deserve to be stripped of their jobs and their headline-making compensation. Those are the people at the top making the macro calls on company strategy, as well as the small group of those directly involved in selling the most toxic of assets. But despite the desire in Washington to find a convenient scapegoat for the downturn we cannot punish the many for the mistakes of the few. The majority of those working in finance do not receive million dollar bonuses. Demonizing profit-based packages for those who earned it strikes at the very heart of capitalism.
Two other points:
Tax filings show that the President's 2007 income was $4.2 million dollars, based primarily on sales of his book. He was a Senator in 2007, a year when the U.S. government ran up huge deficits and failed to anticipate the economic collapse. Should he give some of that money back because the government needs to bail itself out?
Additionally, before the government throws stones, it should look at its own home. This excellent Bloomberg story outlines how the government isn't exactly managing its own "bonus home" very well either.
Initially, I supported the President's proposal, but now I am not so sure. I have seen a lot of anecdotal assertions that most of the $20 billion in bonuses went to rank and file workers, not the senior executives, but I have yet to see a source for this information that can prove these claims. If such evidence exists, I would like to see it.
I do agree, however, that there should not be an across the board cap. Perhaps it would make more sense to cap pay unless it can be tied to documented economic gains to the company (revenue and cost savings)and would have to be appropriately proportional.
As far as the comment about the President giving back some of his $4.2 million in income, the author himself admits it is mostly from sales of his book, so it is not coming from taxpayers, so why should he give it back?
February 9, 2009 at 10:06 am
More Financial » Sifting Through Financial Gray Area
[...] I’ve been hearing some nuance on newscasts and reading some illuminating pieces — like this post from Brian Sullivan’s blog on FoxBusiness.com regarding Wall Street bonuses and an article in [...]
February 5, 2009 at 2:52 pm
johncorn
One must start with the understanding that Obama is both ignorant of and prejudiced against Business. I don't believe that one needs to prove a geometric equation to assert that.
February 3, 2009 at 5:58 pm
Brian T
Sigh
I'm a capitalist at heart. I recognize we can't penalize the 'execution level' workers in companies who DID do their jobs. Whether we like it or there's a percentage of expenditures, that on the surface appear exorbitant, but are necessary. Bonuses, raises, advertising/sponsoring a Super Bowl party (B. O. America), etc. . . HOWEVER. It pisses me off to see an outgoing CEO scramble to let bonuses days before recv'ng my dollars in a bailot. Wells is going on a boon-doggle now for it's 'valuable' people. AIG entertained its execs on my nickle. And, to boot our new president thinks I should do more b/c the "wealth needs to be spread around".
There is plenty of money 'in the system' via taxes. Our gov't is horribly efficient at wasting our money.
But, you know what? We have nobody to blame but OURSELVES ! Unhappy with what's happening, are you ? Well, vote responsibly! Don't vote for the incumbent again b/c he "seems to be doing ok". Reward them with your vote if they've behaved responsibly, and penalize them if they have not. It's very simple.
Hold our politicians respon for their actions and they'll respond by behaving responsibly! Period. Problem is, their constituents benefit by their bringing dollars home to them, so they continue to vote for them. That arrogant blowhard up in Pennsylvania is a perfect example. He's a MUTT in every sense of the word, but he gets elected b/c he brings home the bacon. We better start looking at the big picture, or we're in trouble.
February 3, 2009 at 5:52 pm
movers
As a contract issue most sales people who have a commission plan have to then be paid by the terms of that commission plan, but I do have an issue with the executives who were paid big bonuses on "profits" that were not "profits". Most comp plans have a "claw back" clause so if you are paid for a deal and then the company loses that deal and they already paid you then they "calw back" or take back that money. I believe most people would be ok with paid bonuses if at the same time the company said we are taking back these amounts because they were paid on bad information or false profits/revenue.
February 3, 2009 at 3:38 pm
Bri
"Bonuses were paid to retain the best talent" is the rationale given to justify the bonuses. Two major problems with this:
1. The best talent just created the worst financial mess in several generations.
2. AS far as retention, where the Hell else are they going to go? It's not like there is a shortage of greedy money churners out there or a surplus of ratholes (see: solvent Wall St. firms) for them to ply their trade.
Yet another pantload of elitist reality for the masses to choke on.
February 3, 2009 at 1:28 pm
purpleslog
Should he give some of that money back because the government needs to bail itself out?
I am quite okay with Senators being on an incentive plan with incentives being tied to budget deficits (incentive for 0 or surplus), regulatory size (more regulations = less pay; less regulations - more pay), # of Federal Employees (more employees l=less senatorial pay), Median US Income change or GDP change, etc
February 3, 2009 at 11:12 am
Mike
Comment by chops
Dear Chops, conservative still means the same as it always has. Liberal on the otherhand means strict not conservative. Which is a misnomer; Dictionary meaning of liberal is open-minded or tolerant. But Liberals are not tolerant of conservatives and calling them bigots and hate mongers simply because they don't agree with their ideas, and are not open-minded to conservative ideas. In fact "Liberal" in this country has come to mean, 'liberal with other peoples monies'
February 3, 2009 at 10:31 am
Arlen Dominek
If you're going to compare the financial salesperson with the widget salesperson, then let's make sure that they're compensated at the same rate and let's make sure that they both get commissions based upon some realistic contribution to bottom line. If the financial salesperson is selling some product with, oh, a fifty per cent cost basis, maybe he should get $50-60K base +3% of sales. And if there's some poor kid who is traveling every week, meeting until 11 or 12 at night and at the client's site at 8AM, and working the whole weekend, someone who was graduated at the top of his class, maybe he deserves $150K too. He slaves to get your EHR up or get your AR working. Where's the equity? Where's my return for my risk for my stock investment? And let's not include Obama's book revenues. Get real.
February 3, 2009 at 8:33 am
Owen Bridgeman
You make a salient point. Perhaps the media should do a better job of reporting relevant facts and not generalizing so as to create public opinion. No, I am afraid that would be asking to much.
February 2, 2009 at 4:51 pm
Duane
Excellent point, Thank you for waking up all the Morons
February 2, 2009 at 12:17 pm
Hal Slusher
I wonder what you think if you got a mortgage and the bank decided you were required to keep it exactly how you bought it. Just in case you lower it's value with the wrong kind of landscape. The government owns a sliver of stock and has now decided it runs the company.
February 2, 2009 at 10:35 am
Tim Seretis
ECONOMIC STIMULUS
The trickle down theory has been proven to be a myth. We see the politicians, who by the way are a huge part of the economic mess we are in, trying hard to make the American people swallow the notion that helping their greedy CEO friends in the financial world is better than helping the American people outright. The $800 billion bailout notion of stabilizing the top and thusly it will trickle down is a myth. We need to trickle up!! The $800 billion bailout should and must be distributed to the American people directly in order to have a QUICK stimulus on the economy. Spread the wealth, as Obama calls it, and give the American people, $30,000.00 or $40,000.00. By doing this, the American people will be able to get caught up on their mortgages, their utilities, their rents, and even put food on their tables. Once the American people get a piece of mind and a sense of security, and some confidence, they will also start spending again, thus the trickle up will work.
We all saw what the CEO of Merrill Lynch did, giving huge bonuses to his greedy CEO friends and also spending over $1 million in renovating his office with part of the bailout? Is that considered a trickle down?
Be very aware, because the American people will only take so much and once the people wake, there will be a unrest.
February 2, 2009 at 8:28 am
john t
Brian Sullivan states:
"Many banks factored into this bonus pool did not take TARP money"
Is this statement accurate?
Does anyone know the list of companies that took TARP money that DID give out bonuses?
February 2, 2009 at 7:36 am
Anon Tipper
Why should business get all the attention? There are very high salaries in higher education -- presidents (and coaches) get several hundred thousand AND houses, cars, retirement perks, club memberships. Ordinary workers with very low salaries have to pay for their own car and housing etc. Higher education is looking for lots of stimulus funds - will they reduce salaries if they get federal dollars?
The salaries and benefits are published (Chronicle & other sources) so there are a number of stories here for FOX. Most of the media probably won't go near this because connections to local schools.
February 2, 2009 at 1:00 am
Jack
ITS ALL OF WALL ST, AND NOTHING AT ALL.
Used and abused us ALL.
AND I AGREE 100% WITH THE PRESIDENT AND said it right.
We all live in one house ( GREED AND NEED) See what it does.
And while so many many of us have lost our jobs and SOME THINK CEO'S deserves their bonuses.(WOW)
Has one read the news about people losing jobs and their lives.
So MAN Grow not in AGE but in mind.
We are the wheels of this economy and no matter what car it is,it dosent move without wheels.
And its all about MONEY, right.
(MONEY)Thats where it STARTS and thats what is goin to settle it.
Damage control and it starts form CEO'S.
January 31, 2009 at 10:44 pm
Jack
Doesn't the use of the word "shameful" conjure up images of a stern paternal figure who is about to banish a child to "time-out" without really understanding what when on, who did what, whether the child is responsible??? We need leadership, not dictatorship.
January 31, 2009 at 12:39 pm
zattico
it the democrats who gave them the money ,it is the democrats who condemn them for spending it. so when the democrats give you money ,do not spend it ,for fear that them too will condemn you as well.
January 31, 2009 at 12:21 pm
Lamar Warnock
Thanks for trying to clarify the issue.
Unfortunately you are wasting your breath ... and ink!! The media, the politicians and we the public do not want clarity ... we want a "whipping boy". There is enough fault to go around in this econonmic mess and no reasonable person wants the recipients of federal tax money to illegally or even improperly benefit. However, starting with our President and including all of us, especially the media, it is time to deal with the facts. They may be hard to come by, but I think we want to focus this on those companies who received TARP money, and paid their executive employees unreasonable amounts – whether salary, bonuses, or other compensation. In a matter of a few minutes, on last night's news, I heard the media, politicians and ordinary persons on the street referring to the subject as “CEO bonuses”, “Wall Street bonuses”, “fat cat bonuses”, “executive bonuses”, etc. and the amount of this "fraud" varied by several billions.
We can focus on the serious problem, sort it out and do something about it or we can demagogue. It appears demagoguery is winning !
January 31, 2009 at 11:52 am
Henry Bevers
Let me be up front. I didn't read your entire blog. But, I read the opening para. and from that, your position is fairly obvious. Using the same scenario as you depicted my thoughts are that: 1) No one should get a bonus that exceeds his/her base salary. 2)If a company, from an overall standpoint doesn't make a profit, all bets are off. 3) No company that is in negotions to sell itself should accept a bonus unless contractually allowed by the buyer.
January 31, 2009 at 10:32 am
Listening in Texas
The governement is spending our money as if it were free. (To them it is!)It is NOT theirs and they are NOT being good stewards of OUR money.
They now say we need money for police, road repair, airport repairs, and many other domestic issues and programs.
States need money and many more will be in shortfalls soon. Government is WAY over projecting their revenues as more jobs are lost, less gas revenue from a gallon of gas as people drive LESS. Yet, now they want to create MORE government programs.
But they SPENT that money (our money to fund these projects they are complaining about) to bail out GM, AIG, Fanny, Freddie, BOA, Countrywide, and how many others which those representitives in the House and Senate determined that GIVING money to these companies was MORE important than fixing our roads, hiring police, protecting our borders, supporting our military and such.
Now they want to fund abortions and even those OVERSEAS! They want to SOD Malls.
The short answer for STDs; here is the overall secret to protect yourself and others; abstinence. OK, I just saved the tax payers $400 million dollars.
Is the National Endowment for the Arts REALLY more important than making sure our roads are in good nic? Our government officials think so.
At some point Government will be forced to get SMALLER; then how many jobs will be "lost"? It will be sooner than later!
Which departments get cut?
Now, that's the right question!
January 31, 2009 at 9:00 am
earle
Oh yea,finally something I can disagree about. It's true that the baby's,getting thrown with the bath water ,but it's also true that someone must be held accountable. I'll use the past CEO of "AIG",Hank Greenberg as an example. This guy made billions on a publically traded company as if it was his own,and guess what? It became,"in Vogue" on "Wall Street", rather quickly. Just like the Michael Eisner's of the world, and "Disney". These guys are making more in compensation/bonus's/"golden parachute", than the company's they run, make on the bottom line in any given year(ie.sometimes profits made with-in one year)! This folly has to stop,and the "Board of Director's",hand picked all, duplicating philosophies with self-interest has also poisoned the public's mind to justifibly, or not, openly criticize "Wall Sreet"! They're own arrogance left themselves open for this public backlash,Brian. When your taking money from the taxpayers(that's me ,and you)to get bailed out,(otherwise you'd be unemployed)and you use it to,"retain failure with reward",doesn't make "cents" to me! It's fine,and dandy to spend your money anyway you choose if your hands aren't in my pockets. PS. Personally,I don't like the way President Obama is sensationalizing this subject for his own self interest, seemingly "preaching to the choir" hysterical harmful rhetoric. Thanks Brian, great read as always,...
January 30, 2009 at 10:13 pm
Mr. Obvious
It may be a semantic point to some of you, but there's a world of difference between calling something a BONUS versus calling it a COMMISSION.
Many of your comments read to me as if the journalists who are 'reporting' the story and the President who is talking about it have the story correct. Have any you seen any statistical evidence to back up the claim that these are bonuses? Have you seen any evidence that Bernie Madoff really lost $50 billion?
At many schools, Journalism is one of the few college majors where you don't have to take a single math or statistics class. Once you know that, how hard working do you think these people are? They want to sell controversy, not knowledge. Do they provide links to background information needed to verify their stories? Heck no!
Journalists, and our President, are not above lying to you, or simply misleading you, about all manner of things. For example, what exactly is the STIMULUS in the STIMULUS bill? We already have a federal fuel tax for roads, highways, etc., don't we? Almost all states have one as well. Is your state stealing money from the fuel tax fund to pay for things completely unrelated, such as health care for people in the country illegally? Mine (Illinois) is, and our President hails from here, you know.
Your President is all about flashy image and rhetoric, not dull substance. When will you get it? I call him our Con-Mander in chief.
January 30, 2009 at 9:57 pm
D Browne
I was one of those that thought the government should have stayed out of the Wall St. problem and let the market take care of it's self. Now that the Government has gotten involved they should, for the public, set the rules. After all, my taxes are being used, at some risk, to bail out the wealthy companies. Why should the public not have say in what they feel is a fair stipulation for the wealthy to use the money?
If a company lost money over a FY, then all bonuses, commissions, and stipends should be affected. They are with my company. We all win together or we all loose together. After all, how many of the sales reps got their commission selling the junk?
January 30, 2009 at 6:56 pm
Jon
All of this supposed "outrage" is hilarious! Let's see....we gave a ton of money to a bunch of irresponsible people with no strings attached....and.....oh my god! They didn't spend it wisely?!?! Doesn't this sound familiar? People in this country (and more specifically in this case the president) need to do some serious soul searching. If you make a stupid decision, you have to live with the consequences. It's called RESPONSIBILITY. Unfortunately I don't think this problem is going to get better any time soon.
Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block.
Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.
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Ray Lindsley
Initially, I supported the President's proposal, but now I am not so sure. I have seen a lot of anecdotal assertions that most of the $20 billion in bonuses went to rank and file workers, not the senior executives, but I have yet to see a source for this information that can prove these claims. If such evidence exists, I would like to see it. I do agree, however, that there should not be an across the board cap. Perhaps it would make more sense to cap pay unless it can be tied to documented economic gains to the company (revenue and cost savings)and would have to be appropriately proportional. As far as the comment about the President giving back some of his $4.2 million in income, the author himself admits it is mostly from sales of his book, so it is not coming from taxpayers, so why should he give it back?
More Financial » Sifting Through Financial Gray Area
[...] I’ve been hearing some nuance on newscasts and reading some illuminating pieces — like this post from Brian Sullivan’s blog on FoxBusiness.com regarding Wall Street bonuses and an article in [...]
johncorn
One must start with the understanding that Obama is both ignorant of and prejudiced against Business. I don't believe that one needs to prove a geometric equation to assert that.
Brian T
Sigh I'm a capitalist at heart. I recognize we can't penalize the 'execution level' workers in companies who DID do their jobs. Whether we like it or there's a percentage of expenditures, that on the surface appear exorbitant, but are necessary. Bonuses, raises, advertising/sponsoring a Super Bowl party (B. O. America), etc. . . HOWEVER. It pisses me off to see an outgoing CEO scramble to let bonuses days before recv'ng my dollars in a bailot. Wells is going on a boon-doggle now for it's 'valuable' people. AIG entertained its execs on my nickle. And, to boot our new president thinks I should do more b/c the "wealth needs to be spread around". There is plenty of money 'in the system' via taxes. Our gov't is horribly efficient at wasting our money. But, you know what? We have nobody to blame but OURSELVES ! Unhappy with what's happening, are you ? Well, vote responsibly! Don't vote for the incumbent again b/c he "seems to be doing ok". Reward them with your vote if they've behaved responsibly, and penalize them if they have not. It's very simple. Hold our politicians respon for their actions and they'll respond by behaving responsibly! Period. Problem is, their constituents benefit by their bringing dollars home to them, so they continue to vote for them. That arrogant blowhard up in Pennsylvania is a perfect example. He's a MUTT in every sense of the word, but he gets elected b/c he brings home the bacon. We better start looking at the big picture, or we're in trouble.
movers
As a contract issue most sales people who have a commission plan have to then be paid by the terms of that commission plan, but I do have an issue with the executives who were paid big bonuses on "profits" that were not "profits". Most comp plans have a "claw back" clause so if you are paid for a deal and then the company loses that deal and they already paid you then they "calw back" or take back that money. I believe most people would be ok with paid bonuses if at the same time the company said we are taking back these amounts because they were paid on bad information or false profits/revenue.
Bri
"Bonuses were paid to retain the best talent" is the rationale given to justify the bonuses. Two major problems with this: 1. The best talent just created the worst financial mess in several generations. 2. AS far as retention, where the Hell else are they going to go? It's not like there is a shortage of greedy money churners out there or a surplus of ratholes (see: solvent Wall St. firms) for them to ply their trade. Yet another pantload of elitist reality for the masses to choke on.
purpleslog
Mike
Comment by chops Dear Chops, conservative still means the same as it always has. Liberal on the otherhand means strict not conservative. Which is a misnomer; Dictionary meaning of liberal is open-minded or tolerant. But Liberals are not tolerant of conservatives and calling them bigots and hate mongers simply because they don't agree with their ideas, and are not open-minded to conservative ideas. In fact "Liberal" in this country has come to mean, 'liberal with other peoples monies'
Arlen Dominek
If you're going to compare the financial salesperson with the widget salesperson, then let's make sure that they're compensated at the same rate and let's make sure that they both get commissions based upon some realistic contribution to bottom line. If the financial salesperson is selling some product with, oh, a fifty per cent cost basis, maybe he should get $50-60K base +3% of sales. And if there's some poor kid who is traveling every week, meeting until 11 or 12 at night and at the client's site at 8AM, and working the whole weekend, someone who was graduated at the top of his class, maybe he deserves $150K too. He slaves to get your EHR up or get your AR working. Where's the equity? Where's my return for my risk for my stock investment? And let's not include Obama's book revenues. Get real.
Owen Bridgeman
You make a salient point. Perhaps the media should do a better job of reporting relevant facts and not generalizing so as to create public opinion. No, I am afraid that would be asking to much.
Duane
Excellent point, Thank you for waking up all the Morons
Hal Slusher
I wonder what you think if you got a mortgage and the bank decided you were required to keep it exactly how you bought it. Just in case you lower it's value with the wrong kind of landscape. The government owns a sliver of stock and has now decided it runs the company.
Tim Seretis
ECONOMIC STIMULUS The trickle down theory has been proven to be a myth. We see the politicians, who by the way are a huge part of the economic mess we are in, trying hard to make the American people swallow the notion that helping their greedy CEO friends in the financial world is better than helping the American people outright. The $800 billion bailout notion of stabilizing the top and thusly it will trickle down is a myth. We need to trickle up!! The $800 billion bailout should and must be distributed to the American people directly in order to have a QUICK stimulus on the economy. Spread the wealth, as Obama calls it, and give the American people, $30,000.00 or $40,000.00. By doing this, the American people will be able to get caught up on their mortgages, their utilities, their rents, and even put food on their tables. Once the American people get a piece of mind and a sense of security, and some confidence, they will also start spending again, thus the trickle up will work. We all saw what the CEO of Merrill Lynch did, giving huge bonuses to his greedy CEO friends and also spending over $1 million in renovating his office with part of the bailout? Is that considered a trickle down? Be very aware, because the American people will only take so much and once the people wake, there will be a unrest.
john t
Brian Sullivan states: "Many banks factored into this bonus pool did not take TARP money" Is this statement accurate? Does anyone know the list of companies that took TARP money that DID give out bonuses?
Anon Tipper
Why should business get all the attention? There are very high salaries in higher education -- presidents (and coaches) get several hundred thousand AND houses, cars, retirement perks, club memberships. Ordinary workers with very low salaries have to pay for their own car and housing etc. Higher education is looking for lots of stimulus funds - will they reduce salaries if they get federal dollars? The salaries and benefits are published (Chronicle & other sources) so there are a number of stories here for FOX. Most of the media probably won't go near this because connections to local schools.
Jack
ITS ALL OF WALL ST, AND NOTHING AT ALL. Used and abused us ALL. AND I AGREE 100% WITH THE PRESIDENT AND said it right. We all live in one house ( GREED AND NEED) See what it does. And while so many many of us have lost our jobs and SOME THINK CEO'S deserves their bonuses.(WOW) Has one read the news about people losing jobs and their lives. So MAN Grow not in AGE but in mind. We are the wheels of this economy and no matter what car it is,it dosent move without wheels. And its all about MONEY, right. (MONEY)Thats where it STARTS and thats what is goin to settle it. Damage control and it starts form CEO'S.
Jack
Doesn't the use of the word "shameful" conjure up images of a stern paternal figure who is about to banish a child to "time-out" without really understanding what when on, who did what, whether the child is responsible??? We need leadership, not dictatorship.
zattico
it the democrats who gave them the money ,it is the democrats who condemn them for spending it. so when the democrats give you money ,do not spend it ,for fear that them too will condemn you as well.
Lamar Warnock
Thanks for trying to clarify the issue. Unfortunately you are wasting your breath ... and ink!! The media, the politicians and we the public do not want clarity ... we want a "whipping boy". There is enough fault to go around in this econonmic mess and no reasonable person wants the recipients of federal tax money to illegally or even improperly benefit. However, starting with our President and including all of us, especially the media, it is time to deal with the facts. They may be hard to come by, but I think we want to focus this on those companies who received TARP money, and paid their executive employees unreasonable amounts – whether salary, bonuses, or other compensation. In a matter of a few minutes, on last night's news, I heard the media, politicians and ordinary persons on the street referring to the subject as “CEO bonuses”, “Wall Street bonuses”, “fat cat bonuses”, “executive bonuses”, etc. and the amount of this "fraud" varied by several billions. We can focus on the serious problem, sort it out and do something about it or we can demagogue. It appears demagoguery is winning !
Henry Bevers
Let me be up front. I didn't read your entire blog. But, I read the opening para. and from that, your position is fairly obvious. Using the same scenario as you depicted my thoughts are that: 1) No one should get a bonus that exceeds his/her base salary. 2)If a company, from an overall standpoint doesn't make a profit, all bets are off. 3) No company that is in negotions to sell itself should accept a bonus unless contractually allowed by the buyer.
Listening in Texas
The governement is spending our money as if it were free. (To them it is!)It is NOT theirs and they are NOT being good stewards of OUR money. They now say we need money for police, road repair, airport repairs, and many other domestic issues and programs. States need money and many more will be in shortfalls soon. Government is WAY over projecting their revenues as more jobs are lost, less gas revenue from a gallon of gas as people drive LESS. Yet, now they want to create MORE government programs. But they SPENT that money (our money to fund these projects they are complaining about) to bail out GM, AIG, Fanny, Freddie, BOA, Countrywide, and how many others which those representitives in the House and Senate determined that GIVING money to these companies was MORE important than fixing our roads, hiring police, protecting our borders, supporting our military and such. Now they want to fund abortions and even those OVERSEAS! They want to SOD Malls. The short answer for STDs; here is the overall secret to protect yourself and others; abstinence. OK, I just saved the tax payers $400 million dollars. Is the National Endowment for the Arts REALLY more important than making sure our roads are in good nic? Our government officials think so. At some point Government will be forced to get SMALLER; then how many jobs will be "lost"? It will be sooner than later! Which departments get cut? Now, that's the right question!
earle
Oh yea,finally something I can disagree about. It's true that the baby's,getting thrown with the bath water ,but it's also true that someone must be held accountable. I'll use the past CEO of "AIG",Hank Greenberg as an example. This guy made billions on a publically traded company as if it was his own,and guess what? It became,"in Vogue" on "Wall Street", rather quickly. Just like the Michael Eisner's of the world, and "Disney". These guys are making more in compensation/bonus's/"golden parachute", than the company's they run, make on the bottom line in any given year(ie.sometimes profits made with-in one year)! This folly has to stop,and the "Board of Director's",hand picked all, duplicating philosophies with self-interest has also poisoned the public's mind to justifibly, or not, openly criticize "Wall Sreet"! They're own arrogance left themselves open for this public backlash,Brian. When your taking money from the taxpayers(that's me ,and you)to get bailed out,(otherwise you'd be unemployed)and you use it to,"retain failure with reward",doesn't make "cents" to me! It's fine,and dandy to spend your money anyway you choose if your hands aren't in my pockets. PS. Personally,I don't like the way President Obama is sensationalizing this subject for his own self interest, seemingly "preaching to the choir" hysterical harmful rhetoric. Thanks Brian, great read as always,...
Mr. Obvious
It may be a semantic point to some of you, but there's a world of difference between calling something a BONUS versus calling it a COMMISSION. Many of your comments read to me as if the journalists who are 'reporting' the story and the President who is talking about it have the story correct. Have any you seen any statistical evidence to back up the claim that these are bonuses? Have you seen any evidence that Bernie Madoff really lost $50 billion? At many schools, Journalism is one of the few college majors where you don't have to take a single math or statistics class. Once you know that, how hard working do you think these people are? They want to sell controversy, not knowledge. Do they provide links to background information needed to verify their stories? Heck no! Journalists, and our President, are not above lying to you, or simply misleading you, about all manner of things. For example, what exactly is the STIMULUS in the STIMULUS bill? We already have a federal fuel tax for roads, highways, etc., don't we? Almost all states have one as well. Is your state stealing money from the fuel tax fund to pay for things completely unrelated, such as health care for people in the country illegally? Mine (Illinois) is, and our President hails from here, you know. Your President is all about flashy image and rhetoric, not dull substance. When will you get it? I call him our Con-Mander in chief.
D Browne
I was one of those that thought the government should have stayed out of the Wall St. problem and let the market take care of it's self. Now that the Government has gotten involved they should, for the public, set the rules. After all, my taxes are being used, at some risk, to bail out the wealthy companies. Why should the public not have say in what they feel is a fair stipulation for the wealthy to use the money? If a company lost money over a FY, then all bonuses, commissions, and stipends should be affected. They are with my company. We all win together or we all loose together. After all, how many of the sales reps got their commission selling the junk?
Jon
All of this supposed "outrage" is hilarious! Let's see....we gave a ton of money to a bunch of irresponsible people with no strings attached....and.....oh my god! They didn't spend it wisely?!?! Doesn't this sound familiar? People in this country (and more specifically in this case the president) need to do some serious soul searching. If you make a stupid decision, you have to live with the consequences. It's called RESPONSIBILITY. Unfortunately I don't think this problem is going to get better any time soon.