Posted on 07/02/2009 8:34:25 AM PDT by FromLori
Goldman Sachs (GS) recently said that media reports that its employees would make huge sums based on the firm’s 2009 earnings were not true. It turns out that they probably are. In an article in The Wall Street Journal, the paper says Goldman “is on track to pay out as much as $20 billion this year, or about $700,000 per employee.”
Goldman is just asking for trouble.
Somewhere along the line, large banks which plan to pay their employees richly this year and, in some cases, offer tremendous compensation packages to retain top talent must have missed the Congressional and public outcry about the greed that many believe brought Wall St. down. The incentives for making tens of millions of dollars caused executives to look for financial instruments that would offer big profits, no matter how risky they were.
The wounds from the crumbling of the credit markets are still fresh enough, particularly at The White House and in certain parts of Congress, that if Goldman and its peers insist on returning to the compensation systems that they used in 2007 and earlier the chances of pay caps mandated by the federal government will move up exponentially. Taxpayers will not countenance putting hundreds of billions of dollars into the country’s banking system only to watch a Wall St. firm that got TARP money pay its average worker $700,000, at least not while school teachers make $30,000 and are being laid off in droves as municipal budgets get cut.
Watch for the Congressional hearings on Goldman pay to begin right after the 4th of July recess.
Another taxpayer bailout on the horizon.
Glad to see their wages are going to be on par with us taxpayers who bailed them out. LOL
They must have one heck of a profit margin to be able to pay their employees like that. Sounds like their is no effective competition in that industry.
I’ve heard that supermarkets operate on about a 1% margin. Not saying that’s a good model, either, but it looks like Wall Street is ripping off its customers.
I read somewhere a few months back that Goldman Sachs and JP Morgan are just TWO of the *partners/owners* of the Federal Reserve - the PRIVATE entity that really owns/is behind the Federal Reserve.
I also read sthat the Federal Reserve saved AIG - not because they were too big to fail -but because every member in Congress and other gov’t officials PENSIONS were/are through AIG! Wish I had kept the links but it’s been awhile and I don’t remember where I read it.
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