Wall Street 2013: Bonuses

[Familiar]

Purveyors of Ferraris and high-end Swiss watches keep their fingers crossed toward the end of each calendar year, hoping that the big Wall Street banks will be generous with their annual cash bonuses.

New figures show that the bonus bonanza of 2013 didn’t disappoint. According to the New York State Comptroller’s office, Wall Street firms handed out $26.7 billion in bonuses to their 165,200 employees last year, up 15 percent over the previous year. That’s their third-largest haul on record.

That money will no doubt boost sales of luxury goods. Just imagine how much greater the economic benefit would be if that same amount of money had gone into the pockets of minimum-wage workers.

The $26.7 billion Wall Streeters pocketed in bonuses would cover the cost of more than doubling the paychecks for all of the 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.

And boosting their pay in that way would give our economy much more bang for the buck. That’s because low-wage workers tend to spend nearly every dollar they make to meet their basic needs. The wealthy can afford to squirrel away a much greater share of their earnings.

When low-wage workers spend their money at the grocery store or on utility bills, this cash ripples through the economy. According to my new report, every extra dollar going into the pockets of low-wage workers adds about $1.21 to the national economy. Every extra dollar a high-income American makes, by contrast, only adds about 39 cents to the gross domestic product (GDP).

And these pennies add up.

If the $26.7 billion Wall Streeters pulled in on their bonuses last year had instead gone to minimum wage workers, our economy would be expected to grow by about $32.3 billion — more than triple the $10.4 billion boost expected from the Wall Street bonuses.

This immense GDP differential only speaks to one price we pay for Wall Street’s bonus reward culture. Huge bonuses, the 2008 financial industry meltdown made clear, create an incentive for high-risk behaviors that endanger the entire economy.

And yet, nearly four years after passage of the Dodd-Frank financial reform, regulators still haven’t implemented the modest provisions in that law to prohibit financial industry pay that encourages “inappropriate risk.” Time will tell whether last year’s Wall Street bonuses were based on high-risk gambles that will eventually blow up in our faces.

Low-wage jobs, on the other hand, endanger nothing. The people who harvest, prepare and serve our food, the folks who keep our hotels clean, and the workers who care for our elderly all provide crucial services. They deserve much higher rewards.

What do you think?

 

[Leaf_Ranger]

RE: Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making the Federal Minimum

Those numbers and previews may be correct but I must play the role of the Devil's laywer and ask: what's wrong about those guys making all that money!? Probably those workers deserved it (and while not knowing exactly what they all do, some or all of the work must be stressful), if the bank has that money to spare, then great; they'll also be helping the luxury market and from what I know, the banks are not charity organizations and they are not elected by the people to pursue some equality policy, so more reasons for understanding the motives.

I've started by this since no matter how people judge and criticize it, it won't most certainly change. Yes, I don't think it's right to be "sharing" these bonuses when people are starving, when it could boost the economy and help those in need ad close the gap between riches and poors, but banks are not there for that and, generally speaking, they shouldn't be blamed for that. The situation is different if we're talking about banks that need(ed) state support, banks that are making shadowy moves against its own clients *coghgoldmansachscogh* or, like it happens frequently here in Portugal, if it's about state holded companies were, despite some of the above arguments about people deserving it, the state is involved and has something to say in the decision making and so it shouldn't accept such amount of bonuses to be paid (things get worse when they're being paid when the country is going through external financial aid).

 

[omahanime]

RE: Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making the Federal Minimum

Wall Street firms handed out $26.7 billion in bonuses to their 165,200 employees last year, up 15 percent over the previous year. That’s their third-largest haul on record.

To put that in perspective, that averages out to $161,622.28 per employee. OMG that is more than my wife and I make in 2 years. I am going to be sick.

 

[Athena]

RE: Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making the Federal Minimum

To be fair these numbers.... really don't have anything to do with each other. Wall Street Bankers do make shittonnes of money (not that that should surprise anyone) and it's always interesting to see that number put into perspective, but the amount of money Joe Shmoe Trader makes doesn't really impact the amount of money Lisa Sue Cashier at Wal-Mart makes. The more interesting statistics are the ones that compare CEO pay to worker pay; here is an list of the top 250 of the S&P 500 companies and their CEO to work pay ratio. The "company comments" give some good insight; many comments stress that the amount of money paid to the CEO is a competitive salary, based on performance and merit and meant to attract top talent. Some also object to the inclusion of value of stocks and bonds, or payment that is equity-based, or payment that is deferred for a certain period of time.

 

[Familiar]

RE: Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making the Federal Minimum

The CEO worker pay ratio published in a survey this week shows that in 2013, CEOs of top U.S. corporations were paid $10,000 to $20,000 an hour. On average, CEOs make 331 times more money than the average U.S. worker and 774 times more than the minimum wage worker. The new data comes just a few days after a U.S. oligarchy study showed that America is really ruled by the rich and influential, and not voters. According to an April 16 Inter Press Service report, the news that CEOs make much more than the average worker is fueling the growing debate over economic inequality.

The data reported in AFL-CIO’s 2014 Executive PayWatch analysis shows a comparison of the hourly income of some of the top executives with the hourly income of an average worker. Some of the top CEOs include Michael T. Duke from Walmart, Clarence Otis, Jr. from Darden Restaurants, Daniel M. Delen from Reynolds American, John Legere from T-Mobile, and John Bryant from Kellogg.

A minimum full-time worker would have to work 1372 hours to earn as much money as Michael T. Duke, President and CEO, WAL MART STORES INC. makes in one hour. In 2013, Michael T. Duke had an annual income of $20,693,545 making it 587 times the average worker's pay.

To compare your own income to that of Michael T. Duke and the above top paid CEOs, the Executive PayWatch website allows users to input their own income and find out how that salary compares. Even though the website is somewhat difficult to navigate, the information is very eye opening.

Clicking on the CEOs name while it displays the hourly income, shows a breakdown of where the money is coming from and includes the CEOs annual income, stocks, and bonuses. The information is then compared to the average worker.

For example, Charif Souki -- Chairman, Chief Executive Officer and President of CHENIERE ENERGY INC which deals with crude petroleum and natural gas – has an annual salary of $781,063, a bonus income of $3,200,000, a Value of Stock Awards of $49,210,000, and a Non-Equity Incentive Plan Compensation of $4,200,000. “In 2012, Charif Souki received $57,518,332 in total compensation. By comparison, the average worker made $35,239 in 2013. Charif Souki made 1632 times the average worker's pay.”

The list of the top 100 highest paid CEOs shows Charif Souki in spot number seven. Number one is Lawrence J. Ellison from the Oracle Corporation. His 2013 income was $78,440,657. Lawrence J. Ellison made 2226 times the average worker's pay.

The CEO worker pay ratio described by AFL-CIO’s analysis of available data from 350 companies does not only compare the 2013 income of the CEOs of top U.S. corporations. The report also compares the demographics of those CEOs. According to the website, 95.4 percent of Fortune 500 CEOs are white and the same percentage is also male. In its conclusion, the report states that “even as companies argue that they can’t afford to raise wages, the nation’s largest companies are earning higher profits per employee than they did five years ago. In 2013, the S&P 500 Index companies earned $41,249 in profits per employee, a 38% increase.”

 

[omahanime]

RE: Wall Street’s 2013 Bonuses Were More Than All Workers Earned Making the Federal Minimum

The CEO worker pay ratio published in a survey this week shows that in 2013, CEOs of top U.S. corporations were paid $10,000 to $20,000 an hour.

That is insane!

I will work for the bargain price of $10,000 an hour. I will be happy with 4 hours work this year. Maybe 5 hours since Drohn is still in Japan.