ECONOMY - Continuing Anger, Wall Street Pay

"Bonuses Shrink as Wall Street Reacts to Crawling Economy" PBS Newshour 1/17/2012

Excerpt

JUDY WOODRUFF (Newshour): Now, to the continuing anger over Wall Street pay in light of the slow economic recovery.

It's an issue that has often been front and center since the government bailed out big banks and other firms in 2008 and 2009. It has also helped fuel some of the Occupy protests in New York and around the country.

Today, more than 500 members of the Occupy movement took their messages to Capitol Hill, where they raised questions again about the role of corporations and inequality.

Here's some of what they told us. These protesters only provided their first names.

Another excerpt

JUDY WOODRUFF: William Cohan, so looking at this picture that is -- again, the reports just started to come in. Are these appropriate reductions you're seeing? Are there -- and in your mind as you have been telling us today, you still think some of these amounts that are being paid are excessive. Tell us why.

WILLIAM COHAN, financial writer: Judy, Wall Street has always paid itself excessively, basically from the origin of the phenomenon of Wall Street.

Wall Street bankers, when they were partners of their own firms, generally got paid much more than the common person on the street and always lived much, much better. So this is a phenomenon that's been going on for well over 100 years.

What's been happening, unfortunately, for the last 40 years, since Wall Street firms started going public -- and once upon time when they were all private partnerships, it was all their own money at risk. And if they made a lot of money and they took that out as their own profit, you know God bless them.

But what's happened in the last 40 years, since these firms started going public, and now all the firms on Wall Street are public, is their incentive is to take big risks with other people's money and to pay themselves huge bonuses based on the revenue they have generated.

There's no other public companies on the face of the earth that pay out between 50 and 60 cents of every dollar of revenue in the form of compensation to the people who work there. So even if you cut this compensation 30 percent and put it in deferred comp and stock, et cetera, they're still way overpaid, much more overpaid than they need to be, frankly.