Let's all take a moment to thank our friends at AIG. In the spirit of generosity, employees at the ruined insurance giant have agreed to a $20 million reduction in the $195 million in bonus payments they were previously promised. They didn't have to do it. But they did. To make you happy. Can't we all get along now? [WSJ]
More than two dozen employees of the SEC have been investigated over the past two years for viewing porn on their computers at work. (Could this explain why the agency missed numerous chances to catch on to Bernie Madoff? Maybe!) It's also what a bank employee is doing in the video to your left, although he doesn't appear to notice that one of his colleagues is on live television a few feet away. Needless to say, the bank says it's now investigating the incident. And we're guessing it probably won't be long before the banker has all the time in the world to surf the net for dirty pictures from his home computer. [BI]
Treasury Secretary Tim Geithner got the pounding he was most certainly expecting when he headed to Capitol Hill today to answer questions about the bailout of AIG. If you missed it because you spent the entire afternoon discussing that new unfortunately-named oversized iPhone that Apple introduced today, you can watch one of the more heated exchanges after the jump.
Wall Street may be raking in record profits right now. But unless bankers start go out and suddenly start spending those massive bonuses on meals, liquor, entertainment, clothing, and real estate, well, we're all pretty much screwed: "The city's unemployment rate soared to 10.6% last month from 10% in November, a sign that record Wall Street profits and hints of a national recovery have yet to reverberate through the local economy." [Crain's]
Goldman Sachs blew away estimates today and "delivered its richest quarterly profit in the investment bank's 140-year history," reporting that it netted $4.95 billion in the fourth quarter and $13.4 billion in 2009. The bank also reported that it paid out $13.5 billion in bonuses and salaries last year, which is more than what it handed out in 2008, but down from 2007 when it awarded its employees $20 billion in compensation. Not that Goldman CEO Lloyd Blankfein really expects anyone to pay any attention to his talk of the "lowest ever compensation to net revenues ratio." Per the firm's request, the NYPD set up barricades outside Goldman HQ this morning and a bomb-sniffing dog has been on the scene as well. [WSJ, NYT]
Morgan Stanley chairman John Mack was gracious enough to forego a bonus for 2009. But pretty much everyone else did just fine. Despite the fact the bank reported its first annual loss in its 74-year history this morning, the firm said it set aside $14.4 billion to pay employee bonuses and salaries, "an astonishing figure, even by the gilded standards of Wall Street" and one that's up 30 percent from 2008. Of course, it's always possible the windfall led a magnanimous banker to toss a couple of coins in the direction of the poor guy assigned to polish the Morgan Stanley logo this afternoon. Feel free to consider that the upside if you'd like! [NYT, FT]
Goldman Sachs, the investment bank that you helped rescue back in the fall of 2008, is getting ready to hand out billions in bonuses. But it's a little concerned that you might be annoyed when you hear how much money the firm is shelling out:
The problems appear to be piling up for John Utendahl, the banker best known for being the longtime boyfriend of Tyra Banks. Last Monday, the Post reported that the financial firm he founded, Utendahl Capital Management, had been forced to lay off staff, possibly because of the downturn in the economy. An exec at the firm denied the report, characterizing it as "malicious claims made by a former disgruntled employee." But new problems for Utendahl surfaced just a few days later.
Citigroup reported a $7.6 billion fourth-quarter loss this morning, much of it related to the bank's decision last month to exit the government bailout program and repay the $20 billion it still owed Washington. But don't think of it as bad news. Things are actually looking up! Not only is a big improvement from 2008 when the bank racked up $27.7 billion in losses, but Citi CEO chief Vikram Pandit said in a statement that "he believed the house of Citigroup was finally in order." Count on "sustainable profitability," continued "growth," and—if he's lucky—and fancy office redecoration for Pandit the year ahead! [NYT]
If you're like most people, you're a bit ticked off that the banks that were begging Washington for billions last year are the same ones that are now paying out giant bonuses. (JPMorgan reported today that it set aside a record $26.9 billion to compensate its employees in 2009.) But maybe it's time to stop whining and find something else to complain about?
"Major U.S. banks and securities firms are on pace to pay their people about $145 billion for 2009, a record sum that indicates how compensation is climbing despite fury over Wall Street's pay culture. An analysis by The Wall Street Journal shows that executives, traders, investment bankers, money managers and others at 38 top financial companies can expect to earn nearly 18% more than they did in 2008—and slightly more than in the record year of 2007." [WSJ]
Rudy said on Don Imus' radio show: "When they were paid in cash rather than stock... they balance my budget. They were wonderful from the point of view of getting the money you need to run New York City... they should do a better job of explaining what they contribute, which is really the life blood that makes our economy work." Government compensation reform is, needless to say, terrorism.
It's a good thing many investment bankers are collecting record bonuses. Working on Wall Street just got a lot more expensive! Citigroup raised its cafeteria prices by five percent today, a move that follows UBS's decision last week to begin charging employees ten cents for cardboard lunch trays and Deutsche Bank's recent decree that plastic coffee cups will no longer be available and employees will have to bring a mug of their own to work. [Business Insider]
"As it prepares to pay out big bonuses to employees, Goldman Sachs is considering expanding a program that would require executives and top managers to give a certain percentage of their earnings to charity," the Times reports today. According to the paper, the plan could require execs at the embattled bank to give 4 percent of their annual pay to charitable organizations, which, if true, would mean the bank's chief, Lloyd Blankfein, would have some serious catching up to do. [NYT]
