Cliff Mason wrote a wonderful article on his blog at CNBC.com about how the public doesn't understand the meaning of the word "bonus" as it applies to Wall Street.  With all this talk of late about ballooning lump sum payments to CEOs of failing companies, the general public is on a witch hunt for executives who are taking more money out of their government-funded companies than absolutely necessary.

However, what the public fails to understand is that many people on Wall Street rely on bonuses as a significant portion of their compensation, and are paid a significantly smaller salary because of it.  They are not paid in the paycheck-every-two-weeks-and-that's-it structure like most Americans.  When Obama recently stated that 'now is not the time for bonuses', it was just like saying 'now is not the time for paychecks.'  A bonus IS a paycheck.  I find it interesting that no major media outlets (other than the finance-specific press) are interested in telling this side of the story.


 


Comments

Are you serious?
02/12/2009 09:35

So these guys deserve paychecks over 20 times the yearly national average income (500,000)? Not only that, but when you say that their salaries have been reduced, you fail to mention that these amounts are still far greater than the national average income in there own right. It is a pretty simple calculation according to the common sense mind, go a good job and get paid well for it. If you have any sense of personal responsibility you can't honestly believe these guys deserve such exorbitant rewards.

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02/12/2009 09:52

A lot of the accused "greedy" bonus takers make a lot less than $500,000. Total. They also have great educations and lots of experience. And they live in the country's most expensive city, where a salary of less than $160,000 puts you below middle class in terms of actual purchasing power and living conditions (just read that, but can't find the source right now...). I don't think the national average income really factors into it.

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