It seems like a law of the universe: Water flows downhill, and bankers eventually get their bonuses.
A group of 104 London investment bankers won a court battle this week that may allow them to claim a combined $64 million in withheld bonuses from Commerzbank, a major European bank, according to a BBC report. Dresdner Kleinwort, a British investment bank that employed the 104 bankers, was bought by the financial-services giant in 2008.
Commerzbank took over Dresdner Kleinwort at about the same time the financial crisis struck Wall Street, sending a credit crunch through the international banking system. Because profits took such a plunge at Dresdner Kleinwort that fall, the higher-ups at Commerzbank decided to slash bonuses for the 104 bankers, according to The Wall Street Journal. This week, a London court ruled that the bankers were contractually entitled to an additional 50 million euros, or about $64 million, the amount were initially promised before the crisis hit.
Commerzbank plans to appeal the ruling, according to Bloomberg.
The London court's judgment acts as a sort of coda to the bonus season of 2008, when, it's been estimated, as many as 79 percent of financial-services employees may have taken home bonuses, despite the industry undergoing one of the worst, most damaging years on record.
A group of nine of the America's largest banks -- including Merrill Lynch, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America -- paid out a combined $32.6 billion in bonuses to their workers in 2008, despite receiving some $175 billion in public funds to stay afloat that year, according to a report issued by New York attorney general Andrew Cuomo.
At Goldman Sachs alone, almost a billion dollars in bonuses was split amongst just 200 people in 2008, according to The New York Times.
Bonuses have since receded somewhat on Wall Street, falling in 2011 to their lowest level since the crisis. But with last year's average Wall Street bonus estimated at $121,150 -- or about four and a half times the median U.S. wage of $26,364 -- Wall Street still appears to be doing much better than the rest of the country.The London judge who ruled in favor of the 104 Dresdner Kleinwort bankers said that the bankers were entitled to their bonuses because it was what they had been contractually guaranteed, and that the ruling should not be interpreted as a judgment on "wider issues about the structure of remuneration within the wider banking industry," according to the WSJ.