Corporate Governance

Ban Big Bonuses at Bailout Banks

By Adam G. Kurtz

An overwhelming majority of Americans (70%) say ban big bonuses at banks and other Wall Street firms that required taxpayer bailouts, according to a Bloomberg National Poll.   Only 7% say bonuses are an appropriate incentive reflecting Wall Street?s return to financial health. 

Also, 7 out of 10 Americans say it?s Wall Street?s turn to help bail out the rest of us.  More specifically, poll respondents wanted to tax Wall Street?s financial services firms to reduce the $1.3 trillion federal budget deficit. 

The Bloomberg poll reflects continuing public animosity toward Wall Street and the bailouts.  Resentment of bonuses and banking profits unites all Americans regardless of their political party, gender, age or income.  Surprisingly, over 70% of Republicans surveyed supported a government ban on big bonuses to Wall Street firms that were bailed out. 

While the 2010 bonus pool will probably be smaller than in 2009, the average bonus may be bigger because after job losses the money will be divided among fewer employees, according to a report last month by the New York State Comptroller?s office.  See The Securities Industry in New York City, NYS Comptroller, November 2010. 

Among the six largest U.S. banks, only Morgan Stanley and Wells Fargo & Co. have changed practices so that bonuses are based on long-term performance, according to the Council of Institutional Investors.

Full post as published by PomTalk on December 17, 2010 (boomark / email).