Bonuses are for a job well done, right? Well, despite the economic disaster, it seems that the folks on Wall Street rewarded themselves with $18.4 billion in bonuses in 2008, which is around the same amount as they received in 2004 — when the Dow was “flying above 10,000, on its way to a record high,” says the New York Times.
Of course, that $18.4 billion is much less than 2007 — the record year for bonuses. The Times points out that while things may have been going well in the past — the “gains” of those boom years have vanished — leaving only the bonuses.
Granted, New York’s bankers and brokers are far poorer than they were in 2006, when record deals, and the record profits they generated, ushered in an era of Wall Street hyperwealth. All told, bonuses fell 44 percent last year, from $32.9 billion in 2007, the largest decline in dollar terms on record.
But the size of that downturn partly reflected the lofty heights to which bonuses had soared during the bull market. At many banks, those payouts were based on profits that turned out to be ephemeral. Throughout the financial industry, years of earnings have vanished in the flames of the credit crisis.
More troubling than the blockbuster bonuses of the past are the bonuses of the future. Why are companies that are taking taxpayer money paying bonuses at all?
The companies say that they need to pay their best workers well in order to keep them, even as the job market becomes flooded, says the Times.
In case you were wondering, the average Wall Street bonus is currently $112,000.