More Bonuses for Bankers

A report from the Office of the New York Comptroller Thomas DiNapoli says that bonuses on Wall Street are going to amount to at least $18.4 billion.  The number will likely be higher, though, because this sum fails to include dollars for stock options.  In the event that some options are granted in the money, or close enough to have time value, the sum is greater. It is the sixth best year for bonuses on record.

Hard to believe.

This shows that the ongoing defense of bonuses is actually insincere.  Bonuses were defended for years as a means of rewarding performance.  Corporate governance experts have always had trouble with this idea, but it remained a point of debate among a small community.

Now it appears it is more of a “heads I win, tails you lose” prospect.

The average bonus was $112,000 in 2008 (pdf) . This is amazing.  Its a sum that is higher than all but five other years since 1985.

DiNapoli is lamenting the loss of dollars into his regional economy.  He has no incentive to publish figures that overstate bonus size.  He is also worried about the ability of New York to generate tax revenues in the future – he notes that firms in New York have more than $31 billion in tax credits for 2008.

Obama is mad that the list of high payers includes banks getting TARP money.  There are still very few stipulations made to banks with TARP.  They can use the money to pay dividends, they can use it for Wall Street bonuses, they can use it to make loans in Brazil, they can buy commodes.