Compensation Clash in the Making

Salaries in the US government are low compared to the private sector. Salaries in the banking world are the highest in the world. Last year the top investment banks paid out $33 billion dollars in bonuses to their employees. The Average compensation among managers of investment banks was over a million dollars a year.

Now that the US government will own part or all of these institutions, how does the US government explain that the salaries of these people who brought us all down deserve to be so much higher than their own?

Comments

[schatsie]

You know the Europeans will come out of this much better... The CEOs themselves are not addicted to Over Sized Salaries because they do have a progressive income tax that ALLEVIATES the Gas Pedal for GREED...

The working class in Europe, does have 6 weeks of vacation, health insurance and retires at 60, where the working class here is clawing for the smallest bit of a crappy raise and is planning on working until 70... We are irate finally after 30 years of TRICKLE DOWN/PISS ON the PEONs mentality....

And the worst is that OUR CHILDREN WILL BE WORSE OFF and THEIR CHILDEN WILL BE WORSE OFF.... This country is over 200 years old and in the last 8 years the Repugs have DOUBLED the DEBT.... WE NEED WHISTLEBLOWERS FROM ENRON, ARTHUR ANDERSON, the GOVERNMENT to get assigned to working on this problem and tracking the money....NO MORE OFFSHORING INCOME TO TAX DODGE....

[esanchez]

I think people in the US would understand that much better than in Europe, they have a market oriented mentality. I'm sure the US government will sell these stocks in a few years and they'll get the money back. Countries in the EU don't have a central bank they can control and the crisis could give them this opportunity.

[jhNY]

Would understand what? That executive pay in failing businesses is unconscionably high, and cannot continue now that we citizens own a stake in the companies in question? I think the Europeans would have no problem comprehending any of this, as they by and large have access to better education.

And as for control of the central bank, who is controlling ours exactly? Are you saying the flailings and ineffectual posturing taking place therein is part of a rational plan for the benefit of the nation?

[HarlDelos]

Government jobs pay less because they are SECURE.

While the superstars in the INVESTMENT banking world make a lot of money, that's because they are top salesmen. Top salesmen get paid well anywhere. The reason Ross Perot left IBM was because they decided that they weren't going to pay any salesman more than the president of IBM was making. Ross made enough sales the first few days of January - something like three days - to earn commissions equal to the company president. Since he couldn't make any more money there that year, he left and started EDS.

Bankers in regular banks, like Wachovia or Sovereign, etc., do NOT make high wages. They typically start out as tellers, and after a couple of promotions, they're still making about as much money as a cashier at Kroger.

If all the top earners in corporate America were getting straight commission, I'd want them to be making as much as they currently are, or even more. After all, when they sell a product, someone else gets a job MAKING it.

But "executives" are often not salesmen....

[jhNY]

You'd have to provide proof of your declaration that bankers in regular banks make 'about as much money as a cashier at Kroger', and you won't find it outside the confines of your own head. I knew the president of a local bank quite well in my long-ago youth, and he was quite well-off.

"After all, when they sell a product someone else gets a job MAKING it', yep, and when somebody makes a product, somebody gets a job SELLING it. What's your point?

Reflexive worship of the overclass is often unconscious, but never pretty.

[PDinCA]

People who work in restaurants get free meals as part of their compensation. Why shouldn't bankers get free money? :)

[JBS]

Rationally, that analogy should apply to the tellers and other low level workers, rather than to bank executives.