The Big Bonus Fuss:Why Wall Street Can’t Help Themselves.
The recent news stories about bonus payouts and expensive junkets have made the general public feel that the Wall Street bankers simply just don’t get it or don’t care about the economy or the taxpayers who are bailing out their failing companies. These stories appear to be more evidence of corporate greed “gone wild”.
However, there is another perspective that has been overshadowed by the negative Wall Street news. You may not agree with this thought, but I will write it any way. Wall Street firms actually do get it but can’t help themselves. Here’s why:
To the financial executives, these bonuses are not a reward for performance but an insurance policy against future multi million dollar losses. Future losses? Yes, future losses. The thought of a top employee walking out of the door with their market knowledge, a Blackberry and a network of clients makes financial executives lay awake at night. They know that one person could become a multi million dollar competitor overnight with a small investment and some effort. These bonus payouts are meant to stop their night terrors from becoming real, the Wall Street executives are willing to take the risk of public scorn to retain or delay the departure of these top employees and their super rich clients .
These bonuses are not a reward for performance but an overture for employee retention.