The San Francisco bank Wells Fargo has refunded just before Christmas 25 billion dollars which had been loaned by the U.S. state to avoid bankruptcy a year earlier. Freed of that debt, it can now overcome limitations on compensation imposed by the government institutions it has helped. Duly noted. From December 31, Wells Fargo has detailed the bonus it would pay its executives. But to get the pill from a shocked public opinion by returning to these practices before the financial crisis, she has mentored such restrictive terms of premiums.
The bonus will be paid therefore in shares instead of cash and spread over time. The CEO John Stumpf will receive 379 600 shares worth approximately $ 10 million and three other executives will be rewarded with portfolios amounting to 5 million dollars each.They must wait three years to get the envelopes and have no right unless the bank meets certain performance targets. In addition, they will forget it if they go to a competitor.
Other large U.S. banks have adopted similar measures. Goldman Sachs has also decided that its 30 most senior executives do not receive their bonuses at year-end in the form of shares, blocked five years. Morgan Stanley plans to stagger the two-thirds of the bonus provided to condition and results of the bank. His boss, John Mack, the departure was announced for his part he gave up any bonus for 2009 because of "extraordinary financial support provided by the States in our sector."
Popular indignation
Washington has spent more than 1 000 billion dollars of public funds in its financial sector after Lehman Brothers in September 2008.In response to popular outrage over the back of generous bonuses a year later, Barack Obama has recently denounced the fact that institutions kept afloat by taxpayers continue to enrich a few individuals. The "Czar" appointed by the government to monitor the practices of banks have stopped seven of them had received loans from the state, including Citigroup and Bank of America to pay bonuses in cash. They have therefore sought to develop practical measures for their tinting color morality. However, the money started to flow to Wall Street.
Goldman Sachs has earmarked 21 billion dollars in earnings for 2009 – the equivalent of the amount of 2007, year of record profits. Morgan Stanley has budgeted 10.8 billion.The payment of bonuses in shares rather than hard cash could even be a good calculation for bankers and traders concerned: ridden, the titles of these banks are eager to bounce back with the stock market recovery . Associations of small carriers stand against these measures they want to grasp at general meetings. The Federal Reserve also plans to address the issue. Meanwhile, Santa Claus is pressed by Wall Street this year.
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