2010 was a record year for compensation and benefits paid out by Wall Street financial firms as companies boosted pay and bonuses to $135 billion.
The record in Wall Street pay comes only two years after the financial crisis that crippled many of these firms and forced them to seek government bailouts just to stay afloat. Now, executives and employees are back to earning billions as measures taken by Congress to reign in financial sector pay have generally failed.
Compensation on Wall Street is getting back to “normal”; big bucks that don’t necessarily match the reality of results.
When it comes to paychecks, Wall Street’s law of gravity is back in full force: What goes down must come back up.
In 2010, total compensation and benefits at publicly traded Wall Street banks and securities firms hit a record of $135 billion, according to an analysis by The Wall Street Journal. The total is up 5.7% from $128 billion in combined compensation and benefits by the same companies in 2009.
The increase was fueled by a revenue rebound as the financial crisis recedes in the rearview mirror. At 25 large financial firms that have reported full-year results, revenue rose to $417 billion, another all-time high, even though last year’s 1% increase was just a fraction of the industry’s revenue jolt from 2008 to 2009 as trading and investment banking sprang back to life.
“Things are shifting back to where they were before,” said J. Robert Brown, a law professor at the University of Denver who studies compensation and corporate-governance issues.
Top-level executives at the largest banks and financial corporations in the country received the biggest increases in salary between 2009 and 2010.
One surprising nugget is that Bank of America CEO Brian Moynihan saw his compensation go up 67% even as BofA still lags behind other rebounding major banks and its billions of dollars in losses put the very future of the company in doubt.
As revenue growth decelerated last year, top executives and other employees who boosted the bottom line got much of the gains in pay, said the University of Denver’s Mr. Brown. “Stars will be paid even more, which means other people will be paid less,” he said.
Bank of America Chief Executive Brian Moynihan got a 67% bump in his total compensation for 2010, the company said Monday. Goldman Sachs Group Inc. tripled the salary of Chairman and CEO Lloyd C. Blankfein and increased his stock-based bonus 40% to $12.6 million.
Perhaps it should be noted that the employees of those federal government agencies which worked to make sure that the so-called “financial industry” would not fail back in 2008, have all had their salaries frozen by President Obama for budgetary and political reasons.
And due to the tax break extension, none of these Wall Street bonus gainers will have to pay more in taxes than before they nearly sank the economy…
This should settle all talk that Obama is a classic socialist. Obama is not a socialist, he is a state capitalist, a corporate socialist, or a fascist. Any way you look at it, we are all serfs to the Wall Street banksters