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Not quite. The article is pointing out that the overall level of bonus is not well correlated with the revenue (or profit) of the companies as a whole. The post

Not quite. The article is pointing out that the overall level of bonus is not well correlated with the revenue (or profit) of the companies as a whole. The poster is pointing out that that's largely because an individual's bonus, particularly in areas like IB (where most of the bonus pool ends up), is much more of a function of the revenue the individual brings in. Part of the reason for the discrepancy at the time of the crash is that, until the liquidity crisis gummed everything up, most of the catastrophic losses where in a relatively niche area. A lot of the other parts of the banks did continue to make money. Then when the liquidity crisis hit, the view was, generally, that significant parts of the businesses were still fundamentally sound so there was no point losing good people as they'd be needed to build things back up again. I happen to think that all this is sensible up to, but not including, the bit about losing good people. This was fundamentally self serving and tended to define "good" as those who were successful is a overly risky environment.

ScottBurson 12y ago
It would make some sense, perhaps, if employees with no responsibility for the catastrophic losses still received some bonuses -- though the company's ability to pay the full bonus ought to be factored in. What doesn't make sense is that anyone involved with the losses or in the management chain of anyone who was should still get any bonus at all. That, obviously, includes the CEO. If the CEOs of these companies still received large bonuses -- and my impression is that they did -- that is fucked up.
- lucozade 12y ago
  I believe that most, if not all, of the CEOs of the worst affected companies lost their jobs. Having said that, there would have been a fair few golden handshakes so your point is valid. To my mind the worst of those was Stan O'Neill. He got kicked out when it was just a disaster but not yet a catastrophe (when the mortgage losses were known but before the liquidity crunch) so he walked away with something heinous like $160mm.

ScottBurson 12y ago

It would make some sense, perhaps, if employees with no responsibility for the catastrophic losses still received some bonuses -- though the company's ability to pay the full bonus ought to be factored in. What doesn't make sense is that anyone involved with the losses or in the management chain of anyone who was should still get any bonus at all. That, obviously, includes the CEO. If the CEOs of these companies still received large bonuses -- and my impression is that they did -- that is fucked up.

lucozade 12y ago
I believe that most, if not all, of the CEOs of the worst affected companies lost their jobs. Having said that, there would have been a fair few golden handshakes so your point is valid. To my mind the worst of those was Stan O'Neill. He got kicked out when it was just a disaster but not yet a catastrophe (when the mortgage losses were known but before the liquidity crunch) so he walked away with something heinous like $160mm.