Yet again the banks are expected to announce record bonuses, estimated to be $156 billion for 2011. These bonuses are not confined to the U.S.
It seems that each consecutive year the headlines announce "record bank bonuses." What is surprising is that these words are seen once again at the end of 2011, a year in which Occupy Wall Street protests must surely have 'reverberated within banking circles, raising the question 'is this really such a good time to be seen to be profligate?'
The big banks have decided that their top executives do indeed deserve whopping financial bonuses. According to a report from the The New Bottom Line and The Public Accountability Initiative, this years bonus payments are expected to reach the mammoth figure of $156 billion. The big winners will be Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, US Bank, and Wells Fargo, familiar names to those suffering in the financial crisis. From these seven key players only Goldman Sachs employees are expected to receive a bonus package reduced from 2010, with a mere $13.4 billion projected to be paid out.
Big bank bonuses are not confined to the U.S. On Monday the British Deputy Prime Minister Nick Clegg warned the banks that excessive bonus payments would not be well received by the government, indicating that the government may well intervene if silly amounts are announced. Reutersreported Clegg said "On the eve of bonus season, let no one be in doubt about our determination to use our clout as the major shareholder in these banks to block any irresponsible payments, or any rewards for failure." Of course his warning only applies to the two banks bailed out by tax payer money, Royal Bank of Scotland and Lloyds, in which the government now holds major stakes.
Naturally the big bonuses are paid out to the investment bankers rather than the tellers that receive an average wage. The Bottom Line presented an interesting comparison based on figures from 2010 that showed "It takes the average Bank of America teller 441 hours, or 11 weeks of work, to make what Bank of America CEO Brian Moynihan made in one hour last year ($5,000)."
The Make Wall Street Pay campaign features an open letter for people to sign, demanding that bankers forgo their big bonuses this year. Thus far the letter has attracted 2,543 signatures since its launch at the end of November.