Posts Tagged ‘executive compensation’

The Claw[backs]

Friday, July 8th, 2011

noosey-neckties.jpeg
(photo credit: mangpages)

It’s kind of an understatement to say that taxpayers were peeved when they ended up footing the bill for the government bailout of the “too big to fail” banks. So they may take some comfort in a new FDIC rule that will seriously punish the leaders of failed financial institutions. Among other things, it says that any executive responsible for the collapse of a major financial firm is subject to spooky-sounding “clawbacks.”

Clawbacks are the equivalent of making an executive return two years worth of their salary to the government if a government agency has to step in and handle the collapse. Big banks will also be required to have a plan in place before they go up in flames, to avoid the kind of sweeping support the government was forced to provide in 2008 and 2009.

That’s a lot of pressure on a relatively small number of people. What do you think – whose responsibility is it to keep a financial institution on the straight and narrow? Should employees lower on the corporate totem pole be punished as well?

Wall Street Hurt Just As Much As Everyone Else

Wednesday, March 3rd, 2010

In terms of job creation for the mid-level managing types, yes, they too are hurting.

  • While the market has somewhat recovered and stabilized in the past year or so, and big banks have begun to bounce back, former mid-level executives of banks and financial firms have had a hard time finding work.
  • Many banks and finance companies fear that the stock market boon that helped catalyze the recovery in 2009 may not last, and, to make matters worst, that pending trading regulations will inhibit profitability.
  • It may take months for banks and financial companies to start hiring mid-level executives, but there are currently a plethora of opportunities for senior-level bankers and executives.

Facts & Figures

  • Financial companies have cut nearly 80,000 securities, commodities and investment jobs in the United States since mid-2008.
  • During the recession, New York’s financial services sector shed 44,200 jobs (a 6.1 percent reduction).
  • All told, Goldman Sachs cut 4,800 jobs, Citigroup, 75,000, Bank of America, 45,500, JPMorgan Chase, 23,700, and Morgan Stanley, 8,600.

Best Quote

“The reality is that you get used to a certain level of compensation that is hard to match elsewhere.” – Matt Prendergast, Former Managing Director at Bear Stearns