In a post yesterday, I asked whether the financial sector would have the outrageous cheek to pay its bloated overpaid employees a bonus this year. It did not take long to get an answer. Today, the Times reported:
"American executives of the failed Lehman Brothers bank, parts of which were taken over by Barclays last week, will still receive millions in bonuses. Barclays has pledged to pay $2.5 billion in bonuses and salaries to Lehman staff in New York, whose collapse brought the world’s financial system to the brink of failure.
A group of eight senior executives and 200 key staff will enjoy multi-million-pound rewards for their performance in the past nine months. A further 8,800 staff will share the remainder of the pot, with many having guaranteed jobs as part of the takeover of the US arm of the investment bank."
What does this mean? You work for a company that makes a series of catastrophic investments. These decisions eventually destroys the company and almost bring down the global financial system. Yet somehow, your performance was deemed good enough to earn a multi-million dollar annual bonus.
In banking, there is no concept of failure. If an investment turns a profit; bankers get a bonus. If an investment goes bad; bankers still get a bonus. When times are good, bankers complain about excessive regulation and the need to downsize the government. If the financial sector goes into a downturn and firms start to collapse, bankers claim that the economy is about to fall into another great depression and a massive injection of taxpayers resources is needed.
Many have commented that bankers privatize profits but socialize losses. Bankers do more than that; they also ensure that their receive their fat unmerited salaries and bonuses regardless of their performance.
Something is terribly wrong here. We do we put up with it?