Finance DB2-3 - Part 3 In the first article regarding...

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Part 3 In the first article regarding executive pay on Wall Street, top banks are lining up to collect around $70 billion for staff payouts. Not only is that an exorbitant amount of money to spend on executive payroll, but it comes after having been handed about $700 billion in bailout money from the government. Six banks, including Goldman Sachs and Citigroup, are spending approximately ten percent of their bailout packages on salary. Since the start of 2008, shares in Citigroup and Goldman Sachs have fallen by more than 45%. Similarly, banks such as Merrill Lynch and Morgan Stanley have fallen by even more – 60%. Even worse, Lehman Brothers has collapsed all together. However, despite the overwhelming financial predicaments faced by banks, they continue to pay executives top dollar. Such top dollar, in fact, that many times the “pay pot” given by these corporations is getting close to, if not exceeding the net worth of the bank. At one point, the $10.7 billion Morgan Stanley staff payouts for the year was worth more than the entire market value of the business. Critics of investment banks wonder why the bonus money given to executives is not just used to aid the actual corporations during this time of economic crisis. One source quoted by the article claims that they believe that banks will more
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This note was uploaded on 02/10/2012 for the course FIN 3403 taught by Professor Tapley during the Spring '06 term at University of Florida.

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Finance DB2-3 - Part 3 In the first article regarding...

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