Most of us have probably read about the outrageous money that executives of government bailed out companies were paying themselves as bonuses. Just as a lot of people have read about President Obama’s move to cap executive salaries at $500,000.00 if their companies took any government bailout money. Well it appears that like most things when you want something bad enough you’ll find a way to get and these government funded executives are no different.
According to Sam Stein in a post at Huffington Post the executives of the soon to be merged Morgan Stanley and Smith Barney have figured out just a way. It called retention awards and are in no way to be confused with bonuses (ya okay) nor is anyone to use the word bonuses when talking about these nice fat additions to their bank accounts. The payments are also to be based on performance in 2008 rather than 2009 which means even more bonuses err retention awards money.
While 2008 was challenging for the firms — Morgan Stanley’s client assets in fee-based accounts dropped 25 percent in the fourth quarter, and a round of lay-offs is expected — 2009 is expected to be substantially weaker.
“I think I can hear you clapping from here in New York,” Gorman joked during the call, after announcing that the payments would be linked to ’08 performance. “You should be clapping because frankly that is a very generous and thoughtful decision that we have made. We spent a lot of time kicking this around. We could easily have done it from the point of closing, which is obviously going to be somewhere in the latter half of this year or around the middle of the year. But we just decided… that it was right thing to do, to give you that certainty that it would be based off ’08. ’09 is a very difficult year… So that degree of anxiety, which many, many of you have emailed me about… is now off the table.”
Source: Huffington Post
You can listen to an audio of the conference call talking about this new style of getting money for nothing over on Huffington Post
Yup .. business as usual – like anyone thought things would really change.