Fact: Major international banks are facing massive write-downs in billions.
Fact: Central Banks and at least one Sovereign Wealth Fund (SWF) I know have dished out rescue packages.
Fact: Money from Central Banks and SWFs come from tax payers, indirectly, and some would argue directly. That means your money and my money, directly, indirectly.
Shocking Fact: A recent research conducted by Breaking Views revealed that the total compensation at the 5 largest US investment banks total a little less than USD$66 billion in 2007.
More Shocking Fact: That $66 billion of renumeration managed to deliver a $50 billion reduction in the banks' aggregate stock market value over the course of 2007. Put it in another context: bankers at those banks were each rewarded with $350,000 for diminishing the value of their business by $247,000 EACH, over the course of 2007. And that reduction numbers are mounting still....
Enough facts to digest? Let me summarise for you: The average taxpayer like you and me are funding the high stakes gambles of the high-living high rollers.
And may I be allowed to quote a certain man of deep insight: "....profits are privatised but risks are socialised..."
reference: http://www.breakingviews.com/
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3 comments:
Hey u write good blogs... :) Keep it up!
How about also rounding up the recent fat renumerations that brokers and Ceos are getting for their year end bonuses?
Thanks :)
I am not so sure about brokers, but I suspect they fall into the bankers' category...
The issue of big payouts and compensations of CEOs of large companies is not a recent complaint.
I tend towards Peter Drucker's argument that 20-1 ratio is the limit managers can go if they do not want resentment and low morale to hit their companies (interview between drucker and new perspective weekly in spring 1998).
On the other hand I agree also with Drucker that the CEO's job has become an Impossible Job (The Next Society, 2003).
So how to attract top people for the top job without arousing resentment amongst the workers?
I think a possible answer may be to look to rewards that is not monetary, however remote. And what rewards fall into such category? I shall postpone my reply...
Hi Kel, well said about the facts and I agree with you about the facts of the current market. ie using taxpayers' money for 'investments' and 'salvages'....
I must say that bankers generally earn more than people from other industries simply because they generate more profit for the bank. As such, their salary/bonus will be a small portion of the revenue they bring in. Bear in mind that a typical sales person need to bring in USD1mil (depending on what products they are selling). usually with this, they get abt 10%-20%. As for the CEOs, well, their base is somewhat high ie probably USD2-4million, but the reported earnings usually come from the stock options. SO, if the CEO has got tons of stock options, then of course he gets the dough.
One of my friend used to share with me this... If you are working for SQ, you get discounted or free flight privileges. If you are working for Singtel, you get probably discounted handsets or good plan tarriffs. However, if you work for a bank, then you get money... :-)
As for rewards that are not monetary... tough. Cuz in this society, there is no loyalty for every job you are in.
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