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I have difficulty understanding the negative attitude people have towards bonuses in this case. Are you a Goldman shareholder who feels that the bank is perform

by cims 15y ago

I have difficulty understanding the negative attitude people have towards bonuses in this case. Are you a Goldman shareholder who feels that the bank is performing so poorly that its employees don't deserve bonuses? And when you refer to bonuses, are you referring to bonus pay-outs to all employees or just those connected with the financial losses? Just trying to understand this perspective because it seems very bandwagony.

squishi 15y ago
1. When banks loose money they shouldn't get bailed out. 2. The Bonuses come from bailout money. 3. If the banks want bailout money they should work as civil-servants(and get an average salary) and not pretend that they are winners(like traders or hedge funds - who get no bailouts, when they loose they really loose). Bankers lost money, and caused a major financial crisis so they should Loose their bonuses! We have no capitalism right now. we have Lemon socialism.
- cims 15y ago
  I do understand this sentiment, to an extent. The reality is that all the banks participate in the same job market and need to compete to attract and retain talent. If a bank (regardless of bail-out status) does not compensate employees competitively, it will fail to attract and retain the necessary talent and as such fail to perform. The only way a bank could still succeed without paying bonuses is if all banks did the same thing. Don't hate the player, hate the game.
  - gnaritas 15y ago
    > Don't hate the player, hate the game. Or hate anyone who repeats this meme.
  - smashing 15y ago
    If this were a game, what sport would it be? Last I checked, gambling, and lets be honest, that's what this is, isn't a sport.
- sp332 15y ago
  I heard that from AIG, but I don't remember hearing that about GS?
- endtime 15y ago
  > 2. The Bonuses come from bailout money. GS has paid back their loan, with interest.
MarkPNeyer 15y ago
the bonuses are huge. i started working at a small electronic trading shop in september 2008. the next january, they gave me a 60k bonus - after just 4 months of work. it was my first job, and i was still going to grad school 20 hours a week, and i was living in north carolina, where the cost of living is nothign compared to nyc. so when you couple the fact that they get huge bonuses with the fact that the work they're doing has marginal value for society, if any at all, the sentiment makes perfect sense to me.
- thematt 15y ago
  The bonuses are huge because the numbers are huge and not everybody can do it. The so-called "marginal value to society" is relative. I might not think your job at the electronic trading shop provided much value to society, but that doesn't mean somebody else didn't. I would bet many of Goldman's clients feel they're providing a great value, otherwise they wouldn't be clients. The only valid reason for people to be mad is because tax-payer money was used to provide them with liquidity during the financial crisis. That money has since been paid back (with interest), so I have no problem with Goldman paying out whatever they want to their employees now. In retrospect, I'm of the opinion the US government should have demanded equity in return for the loan, but that's water under the bridge at this point. I'm not a shareholder, so GS can pay whatever they want to their employees.
  - SkyMarshal 15y ago
    >The only valid reason for people to be mad is because tax-payer money was used to provide them with liquidity during the financial crisis. That money has since been paid back (with interest), Was the $800B stimulus paid back? What about the two (and counting) rounds of QE the Fed has implemented (there will be consequences to such huge intervention, it's just not clear exactly what yet)? The financial crisis cost us a great deal more than just TARP.
    - littlegiantcap 15y ago
      The stimulus mostly went to states, I'm not sure if any of it even went to Goldman Sachs. I'm also not sure it's entirely fair to say 1 bank's compensation package should be called into question because of a worldwide recession. Let the shareholders decide what's appropriate.
barrkel 15y ago
Bonuses are a poor incentive match for people creating and selling products whose performance may not be known for years to come; or may have expected average losses, but seem profitable until they blow up big. Bonuses turn into a reward for creating opaque products people don't know how to price and hiding information the market needs. Look up Abacus deal for example.
- MrMan 15y ago
  The perverse incentives baked into the typical compensation structure are bewildering. I can only think that it is herding behavior, similar to the way VCs and other investors rain client money down on tech entrepeneurs who often cash out or throw the money away before their companies have been proved viable. Groupon is a top of the mind example. How could they have been allowed to just cash out when the company had current liabilities that needed to be paid?

by cims 15y ago

squishi 15y ago

1. When banks loose money they shouldn't get bailed out. 2. The Bonuses come from bailout money. 3. If the banks want bailout money they should work as civil-servants(and get an average salary) and not pretend that they are winners(like traders or hedge funds - who get no bailouts, when they loose they really loose). Bankers lost money, and caused a major financial crisis so they should Loose their bonuses! We have no capitalism right now. we have Lemon socialism.

cims 15y ago
I do understand this sentiment, to an extent. The reality is that all the banks participate in the same job market and need to compete to attract and retain talent. If a bank (regardless of bail-out status) does not compensate employees competitively, it will fail to attract and retain the necessary talent and as such fail to perform. The only way a bank could still succeed without paying bonuses is if all banks did the same thing. Don't hate the player, hate the game.
- gnaritas 15y ago
  > Don't hate the player, hate the game. Or hate anyone who repeats this meme.
- smashing 15y ago
  If this were a game, what sport would it be? Last I checked, gambling, and lets be honest, that's what this is, isn't a sport.
sp332 15y ago
I heard that from AIG, but I don't remember hearing that about GS?
endtime 15y ago
> 2. The Bonuses come from bailout money. GS has paid back their loan, with interest.

MarkPNeyer 15y ago

the bonuses are huge. i started working at a small electronic trading shop in september 2008. the next january, they gave me a 60k bonus - after just 4 months of work. it was my first job, and i was still going to grad school 20 hours a week, and i was living in north carolina, where the cost of living is nothign compared to nyc. so when you couple the fact that they get huge bonuses with the fact that the work they're doing has marginal value for society, if any at all, the sentiment makes perfect sense to me.

thematt 15y ago
The bonuses are huge because the numbers are huge and not everybody can do it. The so-called "marginal value to society" is relative. I might not think your job at the electronic trading shop provided much value to society, but that doesn't mean somebody else didn't. I would bet many of Goldman's clients feel they're providing a great value, otherwise they wouldn't be clients. The only valid reason for people to be mad is because tax-payer money was used to provide them with liquidity during the financial crisis. That money has since been paid back (with interest), so I have no problem with Goldman paying out whatever they want to their employees now. In retrospect, I'm of the opinion the US government should have demanded equity in return for the loan, but that's water under the bridge at this point. I'm not a shareholder, so GS can pay whatever they want to their employees.
- SkyMarshal 15y ago
  >The only valid reason for people to be mad is because tax-payer money was used to provide them with liquidity during the financial crisis. That money has since been paid back (with interest), Was the $800B stimulus paid back? What about the two (and counting) rounds of QE the Fed has implemented (there will be consequences to such huge intervention, it's just not clear exactly what yet)? The financial crisis cost us a great deal more than just TARP.
  - littlegiantcap 15y ago
    The stimulus mostly went to states, I'm not sure if any of it even went to Goldman Sachs. I'm also not sure it's entirely fair to say 1 bank's compensation package should be called into question because of a worldwide recession. Let the shareholders decide what's appropriate.

barrkel 15y ago

Bonuses are a poor incentive match for people creating and selling products whose performance may not be known for years to come; or may have expected average losses, but seem profitable until they blow up big. Bonuses turn into a reward for creating opaque products people don't know how to price and hiding information the market needs. Look up Abacus deal for example.

MrMan 15y ago
The perverse incentives baked into the typical compensation structure are bewildering. I can only think that it is herding behavior, similar to the way VCs and other investors rain client money down on tech entrepeneurs who often cash out or throw the money away before their companies have been proved viable. Groupon is a top of the mind example. How could they have been allowed to just cash out when the company had current liabilities that needed to be paid?