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Wall Street pay

By Jodi Westrick  |  October 22, 2009; 11:37 AM ET  | Category:  National Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati  
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If the Wall Street folks were not so greedy, they would self-regulate. The fact is they do not add value relative to their large paychecks. It is a lopsided model where warfighters, teachers, police, and firefighters - people that change lives - are paid the least, and bankers, lawyers, and executives - people that leverage other's work - are paid the most.

Posted by: altruisticone | October 22, 2009 12:11 PM

Wall Street is nothing but Las Vegas in expensive suits. I understand the need to raise capital as a means to fuel our economic growth but what you have going on in Wall Street is not that. Instead what you have is rampant speculation, in fact often it's speculation on speculation. For example remember the steep rise in oil prices last year that was mostly brought about by the Oil Futures market, where people are betting on whether the price of something will go up or down. The same thing happened with the real estate and credit markets. That's not creating capital that's just gambling plain and simple. Wall Street CEOs are just crap shooters who are given gigantic salaries that reflect their egos and they drive their companies into the ground because they win no matter if the company wins or looses.

Posted by: dre7861 | October 22, 2009 12:21 PM

Why not keep it simple and lower the tax boom on them by raising the top marginal rate?

Posted by: CopyKinetics | October 22, 2009 12:28 PM

Ordinarily, I am quite wary of government interfering with free markets...but this is beyond a rigged game. These people have been given EVERY chance to do the right thing, and all they do is scream "socialism!" when someone tries to slow down - not stop - their unbridled greed. Screw 'em. They're parasites and $200k a year is far more than they deserve.

Posted by: hbg16 | October 22, 2009 12:38 PM

If the pay is owed according to a contract, the government has no right to impair that contract. Otherwise, it is no different from the reimbursement rules under Medicare - if you take government money, you get government rules.

Posted by: Ashland | October 22, 2009 1:09 PM

How come the Administration keeps leaving Fannie and Freddie out of its "reform" proposals, like this pay one? It is criminal that Frank Raines is still walking the streets free after getting paid $90 million, and leaving the taxpayers with a bill in the hundreds of billions. But I guess if you're connected to this Administration, you get a free pass.

Posted by: iculus | October 22, 2009 1:12 PM

Wall Street is nothing more then organized gambling for the most part and people turn a blind eye because they are getting paid by these individual (including Congress).

Posted by: cavatellie | October 22, 2009 1:24 PM

When the government has loaned money, yes, they should be able to vote with the Board of Directors of said company to limit/increase an executive's compensation.

That vote should be made public - not just to shareholders, but the American Public. The votes should be weighted by the number of shares each owns.

My only caveat is that when the government is the majority shareholder, then part of a company's acceptance of bailout money should be that Executive Pay is based on performance. If a company does well, then only the merit profit pool is where any merit/performance is paid for the entire company - executives and employees.

Posted by: pv2bdrco | October 22, 2009 1:38 PM

If they took money from the taxpayers, no bonus until the money is payed back.

Posted by: captainhookaustin | October 22, 2009 1:46 PM

This country is governed by the people, for the people. Unless the Bill or Rights says otherwise, the majority can do what they choose. I'm glad to see our great democracy rising up to meet and challenge the grasping, greedy plutocrats. Rich people, as a whole, add very little to our society. As for not being able to hire and retain good people, I say, hogwash. Those dumbbells are lucky to have a job.

Posted by: KateSaunders | October 22, 2009 1:53 PM

If these people and the corporations they represent took the bailout money then until every dollar is returned or paid back the Government can and should regulate them.

Posted by: KBlit | October 22, 2009 1:55 PM

As a former 17 yr veteran financial advisor I can plainly tell you that the upper eschelon in finance are WAY OVER PAID.

Further, the rookies are paid minimum wage plus commission and that "penthouse poverty" creates an aggressive behavior favored by the firms that is bad for private investors. The firms just eject any rookies who buckle under the pressure and break the law.

At thge top, however, the execs break the law all the time and in our current mess, nearly wrecked the economy with their intellectual dishonesty at the credit defaut swap mess - and their current intrangizence refusing to make small business loans the nation's main employers - small business - needs to function.

The leaders of the failed companies do not deserve to be paid bonuses of any kind for their failure. Period.

Posted by: onestring | October 22, 2009 2:11 PM

Only if Congress will let voters have a say in their pay raises that they give themselves every year.

Posted by: ttrox338 | October 22, 2009 2:19 PM

They shouldn't have been given bailouts in the first place. There are the laws of nature and the laws of business/capitalism. If/when a comany can't make a profit then it fails paving the way for better, more innovative ventures. I think this was a well thought out scheme by this Administration to first bailout, then step in and exhibit this type of control over executives. It's a slippery slope we're on in this country, a totalitarian feeling is in the air.

Posted by: ReneesOpinion | October 22, 2009 2:24 PM

I voted "It depends"

If a bank received bailout money, then it is beholden to the taxpayers and we have duty to see that the money goes into strengthening the system, preventing financial harm to taxpayers, and not lining the pocket of some banker who's inept, greed-driven decision making led to the collapse in the first place. By deciding to receive funds, these firms have chosen the "socialist" option and have forfeited their right to behave as solely commercial entities. By recieving the funds they now have public responsibilities until the money is paid back.

On the other hand, if a bank or firm has not recieved bailout money and it has weathered the troubles on its own, then it can and should reward its officers and employees in anyway it sees fit.

Posted by: desertdog1 | October 22, 2009 2:37 PM

I know bashing Wall Street is the name of the game lately, but let me ask you this: What kind of precedent does that set? What is to stop the government from stepping in and setting a cap on your wage or salary?

Some intervention was nessecary. However the bailout was an ill-concieved poorly planned and overinflated package that was rammed down our throat under the guise of armagedon.

Renesopinion is exactly correct. I stated in a WaPo dicussion when AIG was bailed out that it set a dangerous precendent.

Contrary to popular belief the crisis was not caused by lax rules in the market. The market would self regulate under fair market conditions. The problem is that anti-trust law should have been applied long before an instituition gobled up so much market share that it's failure would cause such a financial disaster.

Posted by: akmzrazor | October 22, 2009 3:13 PM

Large Bonuses are a problem because they encourage employees to make risky bets with other people's money.

The federal action will not address this problem.

Instead large bonuses should be taxed out of existence by not allowing corporations to deduct these bonuses as normal business expense and a 85 percent tax rate on bonuses.

Corporations have to be brought back to the salary system and get away from the roll the dice system of compensation.

In 1995 one trader bankrupted the Baring bank which had been in business for 200 years. Neither of the Federal government actions against high bonuses would prevent one trader from bankrupting a firm.

High taxes must be taxed out of existence and Glass Steagall must be brought back. Banks should not be allowed to use the money of depositors to trade in doubtful pieces of papers. Banks should be dealing in loans and not buying and trading securities with the money of the depositors.

After spending trillions of dollars as a result of high risk gambling for large bonuses and banks buying worthless bit of papers the government should act with effective legislation.

Stop the nonsense of fake regulation where the government is going to review the situation on a case by case basis. This did not work in the past and the Federal Reserve totally ignored the doubling of debt in one year from 2 trillion to 4 trillion. If the government could not see a problem in that, how is the government going to see problems in individual payments to bank officials.

Regulation means the No of legislation to tax large bonuses out of existence, and the No of bringing back Glass Steagall.

The largest financial failure since the 1930's and still no meaningful new legislation for reform and regulation.

Posted by: bsallamack | October 22, 2009 3:15 PM

One way or another, the rich will continue to screw everyone else. I cannot imagine Congress--bought and paid for by the rich--doing anything that would actually harm their masters.

Posted by: guitar1 | October 22, 2009 5:05 PM

Will there be any government bonuses this year and the states that recieved stimulus money have been told not to give bonuses?

Posted by: nelsonjackson1 | October 22, 2009 5:44 PM

When are they going to investigate and cut the pay of Barney Frank. He's the guy who was really responsible for both the economic bubble and the bursting of the bubble?

Posted by: tharper1 | October 22, 2009 6:51 PM

yes,if they are still receiving public fundsor have not repaid the bailout money they received.barney frank?thats a joke right.?bushmbush,reagan

Posted by: donaldtucker | October 22, 2009 7:08 PM

How come the Administration keeps leaving Fannie and Freddie out of its "reform" proposals, like this pay one? It is criminal that Frank Raines is still walking the streets free after getting paid $90 million, and leaving the taxpayers with a bill in the hundreds of billions. But I guess if you're connected to this Administration, you get a free pass


Great Post.

Posted by: charlietuna666 | October 22, 2009 8:16 PM

If the banks needed U.S. taxpayer money to help their recovery, if they don't voluntarily hew to the government guidelines to hold back excessive pay and bonuses, and if they ignore the damage their actions caused - then the government should step in and take necessary action. Shareholder have grumbled for years about excessive pay in corporations, and never had the kind of clout needed to hold these people in check. This is the time to show them the way; they are incapable of self-regulation.

Posted by: jbleenyc | October 22, 2009 8:25 PM

Reneesopinion: The bailouts began under your boy Bush. I'd say you got what you voted for.

Posted by: SaffronLove | October 22, 2009 8:43 PM

I think the Pay Czar should be looking into cutting the benefits and salary being paid to the Members of Congress and the White House consider what a poor job they have been doing managing their elaborate spending for the last 9 months !!!
When I/WE do a poor job in the private sector, I/WE get fired !!!
What makes Govt. Bureaucrats ANY different !!!
Next question.

Posted by: thgirbla | October 22, 2009 8:48 PM

Yeah, its fun to whip on rich executives. But....just wait until Obama:
1. Taxes you for health care because you are young and healthy.
2. Raises your taxes on gas.
3. Decides YOU make too much too! (Your a plumber making 80k when ALL THE OTHER plubmers are making 55k) And you have to give some of that "weath" up.

Obama is one scary dictator.

Posted by: Revcain777 | October 22, 2009 9:13 PM

The government already established a minimum wage. Perhaps a "maximum wage" is overdue.
As for the concern over losing top executives to companies without federally mandated pay, how many companies would hire the rat who jumped off the ship he helped sink?

Posted by: hdrlee | October 22, 2009 9:17 PM

Leveling the playing field for those companies that have received bailout funds from those that haven't is very important. Legislation should be written to allow for the stockholders to include performance and oversight roles in executive pay packages. There needs to be a shareholder representative sitting at the board with equal weight for approving those packages.

Posted by: tlaj | October 23, 2009 8:33 AM

"You take goverment pay, you get government rules." Really. That's a new one.

Cause the US Government passed a law on Pay Parity for Federal Workers, but "waives it" under a loophole every year.

While most Feds are grateful to have a job and a small annual increase in today's economy, they are getting underpaid despite a law against it.

Wall Street, K Street, and Greenwich vermin should be in jail, not getting bonuses.

Posted by: georgieporgie2 | October 23, 2009 10:41 AM

I agree with KBLIT that the government has a right to review and/or modify payment to organizations that have borrowed from the government under TARP and not yet repaid it.

The cuts should not be across-the-board but strategic: if units that perform well (with a longer-term yardstick) are paid well (and the inverse), than the losers will leave and stronger candidates will emerge.

Posted by: chinshihtang | October 26, 2009 1:22 PM

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