[Sixstrings]

(CBS) It's no secret that investment bankers are well-compensated, mostly through year-end bonuses, especially during bull markets.

But can they still count on those big bonuses this year, in the midst of the financial crisis and market freefall?

CBS News correspondent Priya David spoke with several compensation consultants who said that, even in this economy, firms are worried that, if they don't pay out the bonuses, they'll lose their top talent -- people they want to keep around for when pastures turn green again.

On The Early Show Wednesday, David reported that lawmakers and taxpayers alike are concerned about where the money for those bonuses will come from.

For Wall Street workers still employed, there could be a hefty bonus in their checks next month.

According to a report from financial news agency Bloomberg, Goldman Sachs, for example, has set aside $6.8 billion for bonuses, and Morgan Stanley, $6.4 billion.

What's got many on Main Street and Capitol Hill angry, David says, is the possibility that some of the $700 billion government bailout package could go into the pockets of Wall Streeters to pay their bonuses.

This is all blatantly disgusting.. and nobody cares, they just flock to McDonald's for the dollar menu (sales up 8% at mickie d's).

http://www.cbsnews.com/stories/2008/11/ ... 5179.shtml

[neocone]

Look on the bright side... more taxes if Obama raises those on whoever makes more than 25k a year... ooops I meant 250k.

I don't mind 100% taxation on whoever makes 10 million + a year... I mean it's the law of diminushing returns: WTF you need above that money anything for?

[Tyler_JC]

Look on the bright side... more taxes if Obama raises those on whoever makes more than 25k a year... ooops I meant 250k.

I don't mind 100% taxation on whoever makes 10 million + a year... I mean it's the law of diminushing returns: WTF you need above that money anything for?

If you create a 100% tax on incomes over 10 million/year, you are going to quickly find yourself without anyone earning more than 10 million/year in your country.

Do we really want to kick out all of our executives, movie stars, investors, etc?

If the firm is taking government money, we have every right to demand that they cut down on wasteful executive compensation. After all, it's OUR MONEY.

But private firms have the right to waste whatever money they want on whoever they want.

Firms that waste too much money are punished in the marketplace by slower growth rates (not enough investment) and will lose out to firms that invest their money better.

[eastbay]

If you create a 100% tax on incomes over 10 million/year, you are going to quickly find yourself without anyone earning more than 10 million/year in your country.
Do we really want to kick out all of our executives, movie stars, investors, etc?

Oh gosh no. Just the one's earning more than 10 million per year who don't want to live in the USA. If 10 million per year isn't enough for them, they can leave if they want to.

Bailout money to pay bonuses. Insane.

[Javaman]

Look on the bright side... more taxes if Obama raises those on whoever makes more than 25k a year... ooops I meant 250k.
I don't mind 100% taxation on whoever makes 10 million + a year... I mean it's the law of diminushing returns: WTF you need above that money anything for?

They might need the money for investments, to start or expand a business. Perhaps they need the money to build a new factory that can make products at a lower cost than might otherwise be possible. With that $10 million they will provide jobs, even jobs for people too ignorant (or too stupid) to understand why someone might want or need more than $10 million dollars.

[Javaman]

If you create a 100% tax on incomes over 10 million/year, you are going to quickly find yourself without anyone earning more than 10 million/year in your country.
Do we really want to kick out all of our executives, movie stars, investors, etc?

Oh gosh no. Just the one's earning more than 10 million per year who don't want to live in the USA. If 10 million per year isn't enough for them, they can leave if they want to. Bailout money to pay bonuses. Insane.

How about they get to keep the $10 million+ they earned.

Edit: ad hominem attack. COC sec. 2.1.4. eastbay

[eastbay]

If you create a 100% tax on incomes over 10 million/year, you are going to quickly find yourself without anyone earning more than 10 million/year in your country.
Do we really want to kick out all of our executives, movie stars, investors, etc?

Oh gosh no. Just the one's earning more than 10 million per year who don't want to live in the USA. If 10 million per year isn't enough for them, they can leave if they want to. Bailout money to pay bonuses. Insane.

How about they get to keep the $10 million+ they earned.

Keep the unfriendly personal remarks out of this section please. This is an economics forum. And this is a suggestion you need to remember.

The problem with THEM keeping the $10 million is that it isn't theirs! It's money they've skimmed off the employees. Corporate salaries are totally out of proportion to the value these top executives add. Or, in the case of the latest twist, it's tax money. It belongs to working people who have paid taxes ... and to future taxpayers.

That's the whole point of this thread!

[nobodypanic]

If you create a 100% tax on incomes over 10 million/year, you are going to quickly find yourself without anyone earning more than 10 million/year in your country.
Do we really want to kick out all of our executives, movie stars, investors, etc?

Oh gosh no. Just the one's earning more than 10 million per year who don't want to live in the USA. If 10 million per year isn't enough for them, they can leave if they want to. Bailout money to pay bonuses. Insane.

How about they get to keep the $10 million+ they earned and if you don't like it, YOU can leave if you want to?

how about we just line them up against a wall?

[smallpoxgirl]

Bonuses for Wall Street should go to zero, US taxpayers say: Bloomberg

[Javaman]

If you create a 100% tax on incomes over 10 million/year, you are going to quickly find yourself without anyone earning more than 10 million/year in your country.
Do we really want to kick out all of our executives, movie stars, investors, etc?

Oh gosh no. Just the one's earning more than 10 million per year who don't want to live in the USA. If 10 million per year isn't enough for them, they can leave if they want to. Bailout money to pay bonuses. Insane.

How about they get to keep the $10 million+ they earned and if you don't like it, YOU can leave if you want to?

Keep the unfriendly personal remarks out of this section please. This is an economics forum. And this is a suggestion you need to remember.
The problem with THEM keeping the $10 million is that it isn't theirs! It's money they've skimmed off the employees. Corporate salaries are totally out of proportion to the value these top executives add. Or, in the case of the latest twist, it's tax money. It belongs to working people who have paid taxes ... and to future taxpayers. That's the whole point of this thread!

These threads seem to be more about politics than economics, so here's some economics:

A lower-level employee is what is called a fungible commodity since any number of people can perform the same job, thus bidding down the wages that he can command.

The owner of the company needs someone with rare talents and experience to run the company, because there is much at stake. He will end up paying this particular employee much more, because it is almost always worth it to do so.

Anyone who doesn't understand these concepts, doesn't understand economics.

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[Sixstrings]

Javaman,

Gee, I guess you're right. Maybe they should double all those bonuses. I shudder to think where we'd be without all that "rare talent."

[Snowrunner]

They might need the money for investments, to start or expand a business. Perhaps they need the money to build a new factory that can make products at a lower cost than might otherwise be possible. With that $10 million they will provide jobs, even jobs for people too ignorant (or too stupid) to understand why someone might want or need more than $10 million dollars.

Very few people do make these kinds of investments with their own money. Plus the taxes are on INCOME not on what you may have lying around.

Actually, if you would "cut the head off" at 10 Million those people would actually be encourage to "get rid" of the money (aka invest it) before the taxman comes a knocking.