100106_FRBES_realbankpayscandal - From FORBES.COM The Real...

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From: FORBES.COM The Real Bank Pay Scandal Thomas F. Cooley, 01.06.10, 12:01 AM ET It's that most wonderful time of the year. A time that quickens the pulse of real estate agents and luxury goods purveyors. A time that gladdens the hearts of restaurateurs and wine-sellers. Break open the cigars. It's bonus time! There has already been plenty of drama played out over Wall Street bonuses this year, well in advance of the ultimate payout. Goldman Sachs became the canary in the coal mine for the entire industry by leaking the projection that their bonus pool would hit record numbers ($23 billion). And CEO Lloyd Blankfein suggested they were "doing God's work." (Which god?, one might ask. Mammon? Château Pétrus?) The backlash from that little affair was pretty powerful and has led to some changes in pay practices for the current year. But, somewhat surprisingly, there is not the deep sense of outrage in the U.S. about Wall Street pay that there seems to be in most of Europe, where draconian taxes on bonuses have been proposed and cheered. It's not as if the naysayers don't have a basis for complaint. Regulators have raised concerns that the risk-taking incentives in compensation structures at financial firms are partly to blame for causing the financial crisis in the first place, and many in Congress have called for regulation and even caps on pay at financial institutions. Financial firms have countered that such constraints would hamper their ability to attract and retain the executive talent needed to steer them back to health and repay taxpayers. But so far, moves to actually curb excessive pay in the U.S. have been largely restrained,
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This note was uploaded on 04/22/2010 for the course MANAGEMENT ADM 1301 taught by Professor Audi during the Spring '08 term at University of Ottawa.

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100106_FRBES_realbankpayscandal - From FORBES.COM The Real...

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