Democracy for Vancouver

Today is Boxing Day, which in the U.K. used to be the day when the servants (who of course had to serve Christmas day) got a rare day off to spend with their families, eating the boxed-up leftovers of their master’s feast. Lucky duckies!

Thankfully, no such outmoded classism gets in the way of the Invisible Hand in the U.S. Here, that bulwark of capitalism, that beating heart of our democracy, Wall Street, only rewards according to merit, and only in proportion to success:

This might have been one of Wall Street’s most dismal years in a decade, but that hasn’t stopped bonus checks from rising an average of 14 percent.

Four of the biggest U.S. investment banks — Goldman Sachs Group Inc., Morgan Stanley, Lehman Brothers Holdings Inc. and Bear Stearns Cos. — will pay out about $49.6 billion in compensation this year. Of that, bonuses are traditionally estimated to represent 60 percent, or almost $30 billion.

But that might not sit well with investors who held on to investment bank stocks this year — and watched them plunge by up to 45 percent. Investment houses have been slammed by the credit crisis, and top executives this past week said they’ve yet to see a bottom.

Further, some of those executives have even agreed to forgo their bonuses this year to reflect the poor performance. Morgan Stanley CEO John Mack and Bear Stearns CEO Jimmy Cayne won’t be collecting their payouts.

Mack received no cash bonus a year ago but received stock and options worth an estimated $40.2 million, well above his $800,000 base pay. Cayne received a bonus of $33.6 million in 2006 and base pay of $250,000.

So, I guess they can afford to forgo their bonus this year, hardship that it is.

Goldman Sachs CEO Lloyd Blankfein reportedly is in line for a bonus of up to $70 million this year… Lehman Brothers’ CEO Richard Fuld was granted a $35 million stock bonus for 2007, up 4 percent from last year.
…
Morgan Stanley, the second-largest U.S. investment bank, reported compensation rose 18 percent to $16.6 billion… This comes after the investment bank reported Wednesday the first quarterly loss in its history amid a $9.4 billion writedown due to the credit crisis.

Bear Stearns, the fifth-biggest securities firm, posted the first loss in its 84-year history on Thursday after a $1.9 billion writedown…

At Lehman, compensation rose 9.5 percent to $9.5 billion, with bonuses accounting for an estimated $5.7 billion. The firm booked losses last week but managed to offset most of its mortgage writedowns…

The bankers in the best position this year are at Goldman Sachs … roughly $12 billion has been set aside for bonuses.

Still nervously waiting to find out about bonuses are the employees of Merrill Lynch & Co. …[T]here has been some speculation newly appointed CEO John Thain might shake up the bonus structure.

Thain won’t get a year-end bonus since he took the job on Dec. 1 after Merrill Lynch ousted Stanley O’Neal because of significant subprime losses. But he did take home a $15 million cash bonus just for taking the job.

That’s life in George Bush’s America for you.

When will we see bonuses for the fewest layoffs and plant closures? The greatest savings due to energy efficiency? The most creative use/greatest reduction of industrial byproducts/waste? The greatest productivity gains, achieved through flextime and employee wellness programs?

Only when the commonwealth becomes part of the bottom line will we truly be a first-world nation.

[emphasis added.]