Firms Taking Bailout Money Defend Retention Pay For Top Brokers

Washington Post:

Handsome pay packages for brokers totaling billions of dollars have turned the public spotlight on another corner of Wall Street compensation: retention pay.

The awards, aimed at keeping top-producing brokers from fleeing to rival firms, are drawing scrutiny in Congress and raising tricky issues in the debate over compensation at firms receiving government funds. The Wall Street firms insist their top talent keeps them competitive and helps ensure their financial recovery; critics maintain that any lush payments in the current climate are intolerable.

Read the whole story: Washington Post

Comments

[munki]

If so, why are economy is going down the tube?
STOP it ! STOP this ugly mess!
If you are getting paid so handsomely...

[ckinsobe]

Who is eating all my comments?

Enough already huffpost!

[nomadicexpat]

were you speaking in rationale thought? those are typically the posts that get deleted here

best to scream and call for banker blood, Ariana likes that

[leftLibertarian]

'Top talent.' LOL!

[Catothemuchyounger]

I don't know much about banking, but I can tell you that in Insurance, top producers are golden. Those companies that are in trouble are losing some of their best producers. The company I work for is snapping some up, and larger companies are targeting more. You can say fulminate all you want about paying people to stay, but losing sales talent is a real problem for these companies, one that management has got to try to get a handle on somehow.

[PlayTOE]

The Wall Street firms insist their top talent keeps them competitive and helps ensure their financial recovery; critics maintain that any lush payments in the current climate are intolerable.

In this case, the taxpayers and voters are the critics.
Wild payments on the public dime are an outrage and a flat THEFT of public trust money.
Obama needs to put his foot down on this and FAST.

No company getting TARP funds should pay anyone more than the POTUS. It's that simple.

[silentknight65]

The violent Revolution that Sean Hannity and Glenn Beck were talking about on their shows won't be against the government...it will be against the corrupt rich people. They all better watch their backs. Hungry unemployed impoverished people, in large numbers, are a force to be reckoned with!

[ramblingjohnny]

I got another word for "Retention Pay" everywhere else we call it looting!

[mainemomma]

Let the guys that are used to making millions go. If they can find meaningful employment, without govt support.. so be it.

In their place, take college graduates, and tell them in order to make 500 g's a year they will need to produce X dollars, with the promise of higher compensation in stock..

Do you think you will get aggressive talent? Give someone a shot, get rid of the dogs that are part of the problem.

[nomadicexpat]

i wish people making all the comments here would take some time and learn how banks work

1) theyre very entrepreneurial places. people get paid for what they produce, and the businesses are almost like franchises within the larger entity

2) the business are very diversified. the guy doing subprime mortgages has little to do with the guy responsible for M&A or the girl who runs interest rate trading

3) hence, there is a need to pay the productive people so that they continue to bring revenues in.

in the current situation the credit guys are hemmoraging money and people who work in commodities, FX, interest rates, M&A and other areas continue to produce revenues. YOU WANT TO KEEP THOSE PEOPLE. it is quite easy to just say "you killed the company", but in reality not everyone did, in fact a small group did

it also is easy to say "where are you going to go", but in reality a) the people most likely to have offers NOW are exactly the people you most dont want to lose and b) taking that kind of attitude kills the firms culture and eliminates any loyalty (ie when things approve, productive people will leave)

the actions most expoused here (by people im sure have minimal management or business experience) will serve to self select the least productive employees to stay

kind of like government i guess

[balickistan]

actually no. but the people you are talking about are the people that are least likely to rise to the top. with the funds used to prop up the banks are the call, by those who caused the problem as well as those who profited from the lack of oversight, that we need to continue to retain those who know what they are doing. its a flawed argument. if they had the diligence they would have seen this coming. since this infection had spread throughout the whole banking system, it means that one part is connected to the other. those who come up with the remedies, paulson, bernanke, geithner, are the same people who will go right back into the system. i'm sorry but all these bastards need to flushed from the system.

[winningticket]

Yeah, I've seen how banks work. Hoarding and using bailout money to cook their books while crashing the economy. Heckuvajob.

[KCFreedom]

I have a hard time believing they need retention bonuses, as the job market for them SHOULD be tight, just like everything else. Something for nothing, in my opinion.

[duze]

Retention for what reason. The companies failed under their watch. Now they have the nerve to threaten to leave if they can't run the same game and get even more money. Bottom Line, who cares if they leave. Don't let them leave FIRE THEM! These people have thrown around their ego's long enough. The company failed under their watch, their gone. The average American is gone, if they don't keep the toothpaste count right at Walmart. Period. Give someone the job who won't allow failure and pay them. This whole idea of (in a circle) negotiations with people proven to be failures and thieves is what makes Americans pissed off more than anything. As we live in the street, people that make millions a year, are stomping their foot to keep their perks, while demanding more. Who ever agrees to let this happen should be voted out as quick as possible. It's maddness.

[American04]

These thugs sold honest American savings. Purge PURGE,…

[bertvan]

CEO's and company executives raiding the till by voting themselves any amount they fancy as bonuses, golden parachutes or whatever -- now THAT'S redistribution of wealth.

[Antifascist-08]

So, we should be involved in corporate blackmail?

Billions to keep their thieves in line and now we have to be involved?

No thanks.

[PhilipTaylor]

If Retention Pay is needed for people who sell "TRICKY" products that have "FAKE AAA RATINGS" then we should send MADOFF a BIG CHECK as he sold $50,000,000,000 worth of FAKE Product and should get a massive "RETENTION BONUS!"

Lets be honest much of what these people have been selling is part of one of these two SCHEMES:

1. Housing Hyper-Inflation Ponzi and Bank Skimming to Bonuses Scheme! Motivation was sell over valued "SURE FAIL MORTGAGE DERIVATIVES!"

2. Casino Insurance Instruments that place Repeated Bets that the "SURE FAIL MORTGAGE DERIVATIVES" are "SURE FAIL" and continues to drive companies into bankruptcy status!

Why should these "TOXIC PRODUCERS" be paid for the "TOXIC FAKE AAA RATED Paper" they sell?

Same goes for the ones that sell the "100 to 1 Leveraged Shorting" and "Naked Shorting products" that continue to run company after company after company into or near Bankruptcy!

[GalenL]

Madoff was writing his own retention bonus...

Not that I actually disagree with you.

[outragedbystupidity]

packaged sub-prime mortgages are primarily an institutional product and retail brokers don't sell mortgage derivatives.

[PhilipTaylor]

Never said they did both with same visibility!

But it was subsidiaries of BIG Wall Street Banks that offered these "SURE FAIL MORTGAGES" with their "TRICKS & TRAPS" and the same Big Banks packaged them and forecast the Housing Hyper-Inflation ten or more years into the future and sold the DERIVATIVES with a "FAKED AAA RATING" to unsuspecting people all over the world.

[outragedbystupidity]

you all are confusing retail brokers/advisors with investment bankers. retail brokers are on 100% commission, generated by the clients they bring in. they had nothing to do with the financial collapse of the banks. in fact, the retail units of brokerage firms and banks are profitable. unlike investment bankers, they don't get bonuses. the retention bonuses are a one-time action designed to prevent competitors from poaching them. top-level advisors are always desirable to other firms.

[Antifascist-08]

you mean top level thieves are always desirable, don't you?

[outragedbystupidity]

are you talking about retail brokers or institutional sales people?

[Mike Kopac]

what other firms...name them

[outragedbystupidity]

the few that are left -- ubs, smith barney, morgan stanley, merrill lynch, wachovia. there aren't many regionals left anymore.

[garbacue09]

I think you are confusing us with people who have never known someone who had their portfolio churned into negative balance by greedy retail brokers. If you care about your customers as much as your commission, you'll be on board with a major change in how these businesses are run. Restoring confidence means you have to suck it too, beyotch.

[outragedbystupidity]

why do you have to name call? what changes are you referring to?

[Halsey]

garb...you are correct..I've NEVER understood how a retail broker can make in the millions..while his/her client loses money. I do NOT think 'retail" were major players in the downfall..but my disgust goes way back...even while market was 'fine"...I got a call from a "friend"..they are a "group" (retail)...who were paid several million 6 years ago to leave Smith Barney to go to USB..well...6 years have passed..so guess what...they're taking MORE millions..to move to Morgan Stanley...forget the customer...it is all about the greed and hubris of the large producer...oh..and they're being sued...by more than one investor..but that doesn't seem to bother anyone... Anyone who give investment advice (and yes..there is a need)..should be FEE-based..pure and simple...the more $$ the client makes..the more $$ the advisor makes. I've thought, for about a year, the "my" clients (I'm not a "big" broker)...clients would be better in 80% cash or equivalents (CD's, etc)...but I don't get paid on those... so..it comes down to..do I eat today...OR do what's right for clients... I've not eaten for quite some time now...will probably get "laid" off for low production..but hey...no one is suing me...if only that paid MY bills..the entire system needs an overhaul..­.commissio­n is OLD SCHOOL and must be throw out... ...