This weekend only, get a Marketplace zip–up hoodie when you donate $8/month. Don’t wait — this offer ends at midnight Sunday!
You remember the big brouhaha over Wall Street bonuses? The outrage many Americans felt after several bailed-out Wall Street firms tried to pay out big bonuses even as they relied on government support? Well, we know that the bonuses in 2009 rose 17 percent to $20.3 billion — even in the midst of public backlash, according to a report from the New York state comptroller. Now, Wall Street is still trying to pay out those bonuses, and a little earlier too.
Wall Street traditionally dishes out its bonuses in January. But because higher taxes may be on the horizon for 2011, some financial executives are mulling paying out bonuses sooner, like in December. Reports say that new bankers and traders hoping to avoid higher taxes are asking for part of their signing bonuses to be pushed up; and senior bankers looking to avoid losing out on thousands of dollars because of taxes may be considering accelerated payment. Firms are looking into the idea — in part as a way to boost employees’ morale and send the message that they care about what their workers are taking home.
[RELATED: Wall Streeters won’t be at Obama fundraisers]
But with financial regulation looming on Wall Street, pushing up bonuses may bring firms some unwanted attention. Earlier this year, former so-called pay czar Kenneth Feinberg scolded 17 companies that handed out huge executive bonuses, even as the economy was teetering on the edge. As part of the financial overhaul enacted in July, several long-term goals have been established to reform executive bonuses, including a “say-on-pay” provision that could affect exec pay.
As the financial sector experiences a faster recovery than the broader U.S. economy, estimates from consultant Johnson Associates say that bonuses are likely to rise from 2009 compensation levels. Among the businesses that could see big increases in bonus payments: prime brokerage, equities-based asset management, and high net worth unit.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.