Banks Find Bonus Workaround

Who would have thought that, in the wake of the financial meltdown, bank compensation would become even less dependent on job performance? The New York Times reports that “on Wall Street, banks have become so eager to lure and keep top deal makers and traders that they are reviving the practice of offering ironclad, multimillion-dollar payouts—guaranteed, no matter how an employee performs.” That means trouble for the Obama administration’s pay czar, Kenneth Feinberg, who is preparing this week to review compensation at the seven companies that received two or more federal bailouts. Feinberg has the authority to set the pay for the top 25 employees at these companies and can set broad pay formulas for the next 75. “Mr. Feinberg has met privately with executives at the companies and urged them to voluntarily rework any guarantees for big earners in advance of the submission deadline,” according to the Times.