Tuesday, January 12, 2010

US banks braced for bonus backlash

SHOOT: I hope they get badly burned.

Andy Stern, head of the Service Employees International Union, was in broad agreement: “They backed the truck up to Fort Knox in broad daylight. They emptied it out, we rescued them and they get $150bn in bonuses.”

His words were echoed by Dan Pedrotty, director of the office of investments at the AFL-CIO, the trade union federation, who said executives were using their banks “like ATMs”.
clipped from www.ft.com

Goldman Sachs, JPMorgan Chase and other big banks are bracing for a renewed public and political backlash against their compensation plans as they prepare to unveil multi-billion dollar bonus packages.

Under pressure from government, banks are already saying they will devote the smallest percentage of annual revenues in years to their employees. But the raw numbers will still be big enough to provoke public anger, while also prompting internal dissent from traders and bankers who will see a larger share of their bonuses deferred.

A taste of the political furore likely to accompany the bonus season came on Sunday from Christina Romer, who heads President Barack Obama’s Council of Economic Advisers.

She called the prospect of big new Wall Street bonuses “outrageous” and cited the pay-outs as a further reason to pursue the administration’s financial reform package, which is before Congress.

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