Leaders of the banks and institutions, bailed out by taxpayers money while their imprudent business practices brought the global financial system on its knees, are rewarding themselves in a way that throws all sense ethics out of the window. Logic given - one needs to pay competitive salaries to attract talent. Talent, huh? Talent for imprudence? Talent for creating monsters a la Frankenstein?
But who cares? As the smaller banks continue to fall by the wayside (at last count there were 140 bankruptcies in the US), the TBTFs are on their way to becoming even bigger TBTFs. Who cares for the systeminc risk? Hell, the leaders need to be rewarded. Maybe for leading us to hell.
Recently Freddie and Fannie (two institutions whose imprudence are part of the folklore now) have announced that they will reward their CEOs with salaries and bonus of $6 mn each. Their packages are entirely in cash. Wow. Maybe WOW.
While their shares are being traded in NYSE for less than $2 each and one is not sure whether these companies will at all turn into profit (and, as a corollary, whether any value would be left of the common shares in the long run), why not give the bonuses in shares atleast? If their performance stinks, why not their compensation? But the niceties are meant only for the taxpayers. For the rich and powerful, its all about making merry. The society is out there to pick up the tab.
Clearly the fate of the common taxpayers all over the world remains the same.