Wall Street firms prepare to pay $30 billion in bonuses

Goldman Sachs, JPMorgan Chase and Morgan Stanley all received taxpayer help, and made the news due to bonus programs last year — which were enabled in part by the taxpayer help. Now it appears that Wall Street is ready for more. The bonuses are expected to surpass the last high, reached in 2007, before the financial market collapse, of $26.8 billion. And it really doesn’t matter what anyone says. Bloomberg reports on what seems to be the prevailing attitude on Wall Street:

“Wall Street is beginning to resemble Clark Gable as Rhett Butler in the film ‘Gone With the Wind’: ‘Quite frankly, my dear, I don’t give a damn,’” Paul Hodgson, a senior research associate on compensation at the Portland, Maine-based Corporate Library, said in an e-mail. “It doesn’t seem as if even political threat, disastrous PR, envy, rising unemployment rates and home repossessions is enough to get any of these people to refuse the bonuses they have ‘earned.’”

Clearly, Wall Street has policy makers nicely sewn up, and populist outrage doesn’t affect Wall Street because it clearly does little to prompt lawmakers to take action. So, while thousands stand in unemployment lines this holiday season, it will be little comfort to know that their Wall Street counterparts are enjoying record bonuses.

Image source: Fletcher6 via Wikimedia Commons

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Wall Street Set to Give Out Record Bonuses

Mack fully believes that Gorman is the right man for the job.

Said Mack: “John and the Board believe James Gorman is ideally suited to lead Morgan Stanley forward. James has a long track record of developing aggressive strategies backed by strong operating skills and relentless execution.”

The 64-year-old Mack deserves recognition for leading Morgan Stanley through the current economic downturn that took the lives of many financial institutions. In the last few months, Mack has attempted to raise confidence in the company by lowering the number of risks Morgan Stanley makes when trading.

“Morgan Stanley is home to incredibly talented people and a superb culture that are the foundation of its global platform and premier client franchise,” said Gorman. “John Mack has spent thirty years helping to protect and enhance that legacy – most dramatically during last fall’s financial crisis. Thanks to John’s strong leadership, we have enormous opportunities to continue growing Morgan Stanley’s premier institutional business in the transformed market environment we now face.”

Morgan Stanley (Image: Flickr)

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James Gorman Next CEO of Morgan Stanley

The bailout money came from the Troubled Asset Relief Program, a program that was set into motion to help the financial industry in the United States and attempt to cushion the blow of the economic downturn.

In a press release, Morgan Stanley stated that they believe the Troubled Asset Relief Program was a success.

Morgan Stanley is pleased to be repaying its $10 billion in TARP capital with an attractive return for taxpayers.  We believe this positive development reflects both Morgan Stanley’s strong capital position as well as the important systemic role the TARP program played in helping stabilize the U.S. banking system since the height of the financial crisis.  After exiting the TARP program, Morgan Stanley will continue working closely with the Obama administration, elected officials, our regulators and our peers on the best possible framework to ensure the safety and soundness of the U.S. banking system.

One reason why companies are rushing to repay the federal bailout loans is due to the fact that many companies are afraid that the federal government may place stringent standards and policies — including employee pay limits and regulation.

Morgan Stanley (Image: Flickr)

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Morgan Stanley to Pay Back Bailout Loans

After AIG executives were roasted for receiving scheduled bonuses, this sounds like a good idea by Morgan Stanley. According to multiple accounts, Morgan Stanley received a lot of help by the United States federal government during the recent financial crisis. Like with AIG, people around the country could have been up in arms with Morgan Stanley if reports indicated that the company took some of the bailout money and handed it to executives.

With specialties in investment banking, financial services and investment management, Morgan Stanley reported had more than $62 billion in revenue in 2008. Around the world, the company is estimated to have more than 45,000 employees.

Morgan Stanley stock was mostly unchanged following the SEC filing.

Morgan Stanley Building (Image: Flickr)

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Morgan Stanley Cuts Bonuses for Executives

Timothy Geithner and Barack Obama (Image: Flickr)

By the end of the trading period, the Dow Jones industrial average was at 7,969.6 — up nearly 1.7% on the day. NASDAQ was up 2.2% to 1,643.9, Russell 2000 was up nearly 4% to 470.1 and the S&P’s 500 was up approximately 2% to 850.1.

On Monday, banks suffered mightily on the stock market. On Tuesday, they did much better. Goldman Sachs was up 4.7%, Morgan Stanley jumped 4.8%, JPMorgan Chase was up 9.6% and Citigroup rose more than 10%.

Geithner said on Tuesday morning that most every bank has enough capital and that the industry on a whole isn’t in major trouble. Some experts were worried that a major government crackdown on banks in the forthcoming weeks would decimate the banking injury.

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Stocks Up on Tuesday After Good Bank News