Unemployment rates may be hitting record levels, but the nation’s three biggest investment banks — Goldman Sachs, Morgan Stanley and JPMorgan Chase — survivors of the worst financial crisis since the Great Depression, are still paying record bonuses this year.
The firms — which have repaid the billions they received through the Troubled Asset Relief Program (TARP) — will hand out $29.7 billion in bonuses, according to analysts’ estimates. The three will award more in stock and defer more cash payments under pressure from regulators to tie pay to long-term results, compensation experts said. They may still face public wrath over the size of bonuses after the government injected capital into all the major financial institutions following Lehman Brothers Holdings Inc.’s collapse in September 2008.
“Wall Street is beginning to resemble Clark Gable as Rhett Butler in the film ‘Gone With the Wind’: ‘Quite frankly, my dear, I don’t give a damn,’” said Paul Hodgson, a senior research associate on compensation at the Maine-based Corporate Library. “It doesn’t seem as if even political threat, disastrous PR, envy, rising unemployment rates and home repossessions is enough to get any of these people to refuse the bonuses they have ‘earned.’”