Have you ever dated one of those guys who never has any money? Like you go out to the movies or whatever, and you have to pay because he’s like, “I spent my entire paycheck on weed”? He never brings you flowers or anything like that because of his lack of funds, but also because, you figure, he is a burgeoning alternative rock star, and beyond engaging in such corny behavior. Then one day he suddenly shows up with a bright, shiny multi-thousand-dollar guitar. “Check out this riff!” he says, as you clench your teeth and silently seethe.
Okay, maybe it was just us. But we were reminded of That Guy today when we read the news that despite their roles in the worst financial crisis since the Great Depression, Morgan Stanley, Goldman Sachs, Merrill Lynch, and Lehman (Lehman!) all still, somehow, had billions of dollars left over for bonuses:
Five straight quarters of losses and a 70 percent slide in its stock this year haven’t stopped Merrill Lynch & Co. from allocating about $6.7 billion to pay bonuses.
Goldman Sachs Group Inc. and Morgan Stanley, both still on track for profitable years, have set aside about $13 billion for bonuses after three quarters, down 28 percent from a year ago. Even some employees at Lehman Brothers Holdings Inc., which declared the biggest bankruptcy in U.S. history last month, will get the same bonus they received a year ago.
Lest we forget, Goldman Sachs announced last week it was laying off 10 percent of its workforce. Merrill Lynch will be laying off at least 5 percent, and Morgan Stanley has cut 3 percent, and it’s rumored that lots more are on the way. Apparently, the money for those salaries has been allocated to other things. Now, who’s buying the prom tickets?
Broken Securities Industry Still Has $20 Billion to Pay Bonuses [Bloomberg]