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Bankster of the day

Robert Kelly:

Feb. 19 (Bloomberg) -- Bank of New York Mellon Corp. Chief Executive Officer Robert Kelly said he opposes a limit on bankers’ bonuses because it could make senior executives quit.

Why isn't cleaning out the executives who fucked up exactly what we should be doing?

Sounds like we need to replace the categories "exempt" and "not exempt" with "entitled" (the executives) and "not entitled" (everybody else).

Because if any normal employee fucked up as badly as the leadership of our banks, they'd have been fired, no question, based on performance.

Pay caps would discriminate between domestic banks and other financial firms such as international banks or asset managers that wouldn’t be covered by the restraint, Kelly said in an interview in Dubai today.

“The unintended consequences of an un-level playing field could mean that at a time when you want stability in senior management and you want your banks to be more successful again, I would worry that you could potentially lose senior executives,” Kelly said.

Bonuses are under pressure across the world as governments bail out banks. President Barack Obama’s administration has limited bonuses for senior executive officers and the next 20 highest-paid employees at companies that receive more than $500 million from the U.S. Troubled Asset Relief Program. BNY Mellon, the world’s largest custodian of assets, was one of eight companies that last year received a combined $165 billion as part of the TARP.

As far as the "level playing field," I agree with Kelly. It's not equitable that compensation should be limited only at bailout banks.

Compensation should be limited for all executives, as a way of reducing the income inequality that's creating Richistan and the rest of us, and as a way of getting the CEOs to focus on their jobs, instead of hookers and blow.

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coyotecreek's picture
Submitted by coyotecreek on that these "people" don't get it. They continue to whine about their own positions when the rest of us are going under day by day.

If they can't be bothered to understand what the real world is going through then someone should tell the to STFU (Sirota, where are you when we need you?) - They are making bigger fools of themselves - and I believe, raising a level of anger in this country that has not even begun to be expressed.

They should keep their heads down and their traps shut.

The Mayor of Lansing, Michigan (MSU!!!!) gets it. I feel it with everyone I know - regardless of their status. It's Obama and his privileged friends in Congress, banking, and insurance who are totally out to lunch.

Submitted by ohio on

Shainzona, the first is that as senator, Pres. Obama was incidental to the ongoing shitstorm. Sad, but true. He wasn't in the inner sanctum where decisions are made. Frankly, I don't know if he's part of the inner sanctum now as I'm not terribly sure if he actually has as much power as I would have thought. So I think including him here is unnecessarily dragging in those who don't deserving dragging in. At least not yet. (If I misundersttod, pardon me as I've been using acetone the past couple days and you know, it kills the brain.)

Lambert, pal, not every single senior exec at every single bank, brokerage, and credit union sucks cilantro. Some of these folks have managed to steer clear of the worst, protected their companies, investors, and even depositors. We may very well need these people. And compensation is based on negotiation. The best we can hope for ehre is that Robert Kelly played a card too quickly in the negotiation---too many regular folks, upon hearing or reading these words, will respond exactly the same way you did, and fear or citizen swarming (or boycott) may be the only thing that pressures the people he's negotiating with.

Please read re: acetone's brain-killing properties above. One effect of the chemicals may be that I am hoping when I ought to be coping. Or moping.

Submitted by lambert on

Bring it back to the 50s or 60s when there were plenty of rich and powerful people.

Let's have some balance, here. Sure, legislating executive compensation to some multiple of the line worker's might be a crude instrument, but trying to incentivize them with options, etc., hasn't worked out real well either.

NOTE Yes, I've posted several times on how local banks and especially credit unions avoided the greed and the insanity. They are not the target of this post, and I'm betting, from their behavior, that they were compensated in a far more Rawlsian fashion.

Submitted by ohio on

Incentives don't come out of thin (or even fat) air. If you sell more than me, bring in more profit than me, shouldn't you get more compensation than me?

I think the heart of the problem is in the short-terminess of these compensation packages. Boards could choose to reward the long-term health of the company (I reserve the right to take back my implication that healthy companies mean healthy economies because I am doubting everything right now) such as offering stock options that don't vest for another 5-20 years, for example---may actually work since you're relying on greed and not "moral hazard." Snort. Moral hazzard. Sheesh. Not even I am afraid of moral hazzard.

Mortal hazzard, that's a different story. That I am afraid of. Especially in the form of a table saw.

(Actually, that 5-20 vesting idea may be a pretty good one and legislatively possible since there's existing law about stock options and vesting schedules. Huh. Look at that. Maybe acetone is a miracle vapor.)

Smarter customers* would help. Or even shareholders or investors (and we're all going to be this soon because SocSec as we know it is going away, end of story) who invest only in companies that act in ways they approve of. There are social investing funds out there, as well as brokers, etc. You can also choose to take a lower rate of return in exchange for keeping your investment closer to home, like putting your money in a credit union. Or in no bank at all. Or in the Bank of OhiChi, which is the new bank me and chi-dy are going to start only don't tell her yet because I haven't shown her the PowerPoint.

I have no answers, my friend. I don't trust politicians to do what is right because it is the right thing to do, so instead, I will do what I think is right. I've done enough selling to know that a current customer is of greater financial value to my business than a new one because the existing customer is much more likely to continue buying from me. If I want to change the way banks do business, I can only do business with a bank that I think is doing things right and make it clear to 'em why I am choosing not do business with 'em. Call it a sternly worded letter followed by a wallop to the wallet. A sternly-worded wallop.

And when there are enough of us, politicians will follow because that is what they do. They're a bunch of greedy bastids, too, and I am counting on that to plan my course of action. Then maybe we will have government doing what government ought to be doing.

*I am not saying it's all the customers' fault, because it isn't. I think, though, that a workable solution starts and ends with us individually because purchasing decisions are made every day by, you know, people. Me and you.

**I haven't forgotten about the horizontal discussion between you, tnjen, and me. I just have to find time.

NOTE ON YOU NOTE: Okey-doke. Flipside, not every senior executive is a scoundrel, so how do we tell the good from the bad? They don't wear halos. I suppose you could argue that if they're a senior executive, then they deserve what they get, whether they are competent or not, whether they could be helpful or not. And frankly, take them out of the compensation package as Senior VP of Global Robbery and they will just quit and come back as consultants with unlimited compensation.

Davidson's picture
Submitted by Davidson on

TruthOut had a similar article on why it's an empty threat on the part of executives and why it's actually good that banking as a profession is tanking and the CEO of Netflix thinks that instead of pay caps we should increase their taxes.

From TruthOut:

But what about the argument that the pay caps will make us lose the "best brains," as this restructuring takes place? Well, who are the highest paid bankers, the ones who should (but might not) chafe most under the new restrictions? The highest paid bankers are the "deal makers," the "rain makers," the ones who figured out how to create the toxic securities, the structured investment vehicles, the credit default swaps and sell them around the globe.

We do not want these kind of deals to be made anymore and so we do not need these top brains - or any brains - to make them.

In fact, our real problem has not been a brain drain, but the reverse: a brain rush into banking.


It was like we faced a banking black hole-sucking in many of the good young minds of several generations - never to be seen again in the classrooms of schools, hospital wards, engineering firms, or solar cell manufacturing firms. Never, at least, until now.

Banking is so representative of the predator state that we're living in: parasitic. The bankers fucked up their jobs so badly they took out their industry and helped trigger the damn global meltdown, and not only do they expect to keep their high-paying jobs but also "their" bonuses--in a most troubling economy (where even lawyers are being fired) and with the US taxpayer bailing them out.


Then again, this is who they are: entitled, ignorant, and arrogant to the point of satire.

Oh, and let's all shed a tear for Swiss banking secrecy. Apparently, when you conspire to commit fraud against the US IRS, it's just horrible when they have to disclose some of the names of Americans who refused to pay their taxes.

Submitted by ohio on

Seriously, is it incompetence that dreamt up credit default swaps? Incompetence that sold the securities? Incompetence that moved money offshore? Incompetence that negotiated obscene compensation packages?

Immoral, yes. Greedy, oh, my, yes. Illegal, not always. But incompetent? I wonder. Actually, I don't wonder.

And these folks don't care what names you call them: incompetent, thieves, robbers, bloodsuckers---they don't care. Money is a wonderful shield; epithets bounce right off the gold-plated helicopters of the rich. And for the sensitive rich, well, they will hire therapists and preachers to hand them tissues while they weep at our namecalling.

Isn't that just swell?

Davidson's picture
Submitted by Davidson on

I wrote that they were parasitic and they fucked up their industry and the damn economy. And by "fucked" I don't mean incompetence, but messed it up, left us with a disaster. The context should have made that clear.

For the record, I don't think they're incompetent. I've commented before how it's part of a plan to bleed us dry since they've done it before (Argentina, for one; Iceland, a more recent example).

Submitted by ohio on

I was wondering about the thing you quoted and the brain rush. I construed it to mean stupid people are in charge in the banking industry and that you agreed with that.

I was hoping for further expansion of your view, but clearly offended. So forget it and not to worry, I have learned my lesson.

Davidson's picture
Submitted by Davidson on

It doesn't say that bankers are stupid. It implies the opposite actually (e.g., "top brains;" many "good young minds" going off to finance). It merely says we shouldn't want any brains making such contorted banking schemes and that for too long banking has sucked in way too many young, talented people.

And, lastly, I think you're reading way too much into my previous comment. Clearly offended? How so? I used the words "fucked" and "damn" because those are the words I had used previously. All I was trying to do was clarify things because I was honestly confused as to what you were talking about. Maybe I should have put those words in quotes (as I did in this comment)? I guess.

pie's picture
Submitted by pie on

quarterly letter written by GMO's Jeremy Grantham at CR. He targets some very specific people and presents quite an indictment of the Bush administration and Wall Street.

The single word that probably best summarizes all
of our feelings toward this last, truly miserable year is
“disillusionment.” We have all been, I believe, serially
shocked by the lack of competence and misguided
philosophy of our top offi cials, who for years encouraged
rather than discouraged the bad tendencies in our fi nancial
system. We have been amazed at the third-rate job done
by the leaders of our great fi nancial fi rms, above all by
their lack of moral fi ber in restricting what could best be
described as an orgy of moneymaking at any price. As
stockholders, we also know we did little to put on the
brakes; as individual clients and home buyers, we also
did our bit to make it easy for greed to win out. We were
willing gulls in an age of gullibility. Madoff has done
historians a good turn by making it so clear that we were
looking to make our 1.5% fees rather than looking to do
hard analysis, and that collectively, even when we were
suspicious, we were trying not to rock the boat. And, most
signifi cantly, our regulators were happy to leave no stone
But it was worse than merely a decay of fi nancial
integrity. 2008 capped in incompetence what I am sure
will be remembered as the most incompetent eight years
of government in modern times, and a contender even if
we include ancient times. Over an even longer period, as
Paul Krugman would say, we tore up the social contract;
through tax changes favoring the rich, we aided and abetted
the strong global economic forces that already tended to
concentrate wealth in the hands of the already rich. It was
an uncharitable, unsympathetic, and avaricious era in which
the cult of the individual trumped overall society, and the
drive for wealth and the luxuries of life took precedence
over more worthwhile and longer-lasting values. Most
of our society got richer in the last 20 years, but there is
not a hint of research that suggests we got happier, and
plenty that suggests the reverse. In the process, we took
some giant steps toward ruining the planet and had to live
with the sight of many wealthy fi rms funding expensive PR
programs that attempted to obscure the science and suggest
that coal is clean and all is well. In short, we messed up
on a very broad front, and last year was when it became
impossible not to see it. If you ended the year without
becoming disillusioned, you were not paying attention.

Read the whole thing. Someone gets it.

pie's picture
Submitted by pie on

...because it could make senior executives quit.

And they've done such a great job anyway. Hey, there are several junior executive waiting in the wings. Hopefully, they didn't learn bad habits from daddy.

gqmartinez's picture
Submitted by gqmartinez on

Are the pay caps for all banksters or just the ones who effed up and need bailout money?

apolitiko's picture
Submitted by apolitiko on where the hell will these banksters go after they quit?

Great Resume Item:

Past Job Experience: Manager of 'Investment' Portfolios
Screw the People Bank of America
Laissez-Faire Town, USA
Reaosn for leaving Job: Bank went into failure---not my fault!

And where is someone going to pay them MORE than 500,000 a year?

Face it, they aren't going to leave their jobs in droves in this economy. That this argument is still passing is a complete joke.