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Some win no matter what happens
Sunday, November 8th, 2009 11:58 am | Author: Jerry | Economy, Life, Money |
Tags: banking, bonus, options, performance, stocks
This morning I read an article in the New York Times about the windfall coming to many bankers.
While the government is trying to enact regulations to control Wall Street many bankers will see a substantial increase to their bottom line.
This is a result of financial institutions turning to larger percentage of compensation by distributing stock and stock options. This was partially due to a reaction by Washington “demanding that a greater portion of pay be made in stock in hopes of rewarding long-term performance rather than short-term bets.” This appears to have backfired.
The stock grants and options were distributed when most financial stocks were at all time lows.
The recent meteoric recovery of the markets has assured bankers of hefty returns in a very short period of time and totally unrelated to their performance.
In lieu of a large bonus Goldman Sachs “gave its general counsel 104,868 stock options and 14,117 shares in December, when the bank’s stock was around $78. Now the bank’s shares have more than doubled in value, making that stock and option award worth nearly $12 million.”
“Goldman’s bonus pool last year was $4.82 billion, according to the New York attorney general’s office, but because about half of that was paid in stock, it is now worth upwards of $7.8 billion. At JPMorgan Chase, workers have seen the value of the stock awarded them last year increase at least $3 billion.”
It seems that no matter what financial institutions do their executives wind up making a killing.
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