Return of the bonus

After all the recent talk about remaking Wall Street and changing the culture of greed, the bonus claws back.

[Goldman Sachs], which nearly halved its compensation last year, set aside $4.7 billion for worker pay in the quarter. If that level continues all year, it would add up to average pay of $569,220 per worker — almost as much as the pay in 2007, a record year.

Not to pick on Goldman -- they're just the example -- but crazy, out sized bonuses create the wrong incentives. Especially in a culture of money, they distort the entire system.

Yes, these people work hard, and they generate a lot of money for their companies. I call that having a job. The vast majority should get a reasonable salary and then a very modest bonus. Then, by all means, give a bigger bonus to reward the high producers to separate them from the middle of the pack. But the middle of the pack guys make huge money. That makes no sense.

According to the article above: "Historically, investment banks have paid workers about 50 cents for every dollar of revenue." If that doesn't shock you, then nothing I could say could change your opinion.

Just keep in mind that the bankers in Iceland didn't do anything worse than what happened here in the U.S. The only difference is, their economy wasn't large enough to bail out their financial industry. So, before we return to "normal", don't forget how bankers are viewed in Iceland!