Wall Street Bonuses Are Too Small for Many
The pay divide at big banks has only gotten wider, leaving many disgruntled and prone to mistakes.
Bankers need to spread the wealth better.
Photographer: Henry Miller News Picture Service/Getty Images
Wall Street banker bonuses are supposed to be kept secret for a variety of reasons. If everyone knew who was paid what, there would be an uprising as people discovered that clear underperformers were getting compensated more than them. It happens. Wall Street compensation is not always about performance. As I outlined in a column earlier this year, it’s largely driven by office politics. I didn’t tell anyone what I received when I worked at Lehman Brothers Holdings Inc. outside of my partner on the exchange-traded fund trading desk.
Information about very large bonuses became public in Lehman’s bankruptcy filing, which had a list of the highest-paid employees in the firm. My boss’s boss made $8 million a year, and his boss made $25 million. A handful of people were making from $60 million to $80 million. The response within the firm was: so that’s where the money went. I was making $850,000, which is nothing to complain about, but I felt I probably deserved an extra couple hundred thousand. Bonuses, though, are a zero-sum game. A certain percentage of profits is allocated to compensation, and if one person gets more, someone else gets less. That’s just how it works.