Archive for October, 2009

New York Eclipses London as Financial Center in Bloomberg Poll

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 Published in Bloomberg October 30, 2009 by Alison Fitzgerald
 
New York has withstood the worst economic crisis in seven decades and remains the leading global financial center, followed by Singapore, which topped London as investors’ preferred place for doing business, according to Bloomberg Global Poll.
Twenty-nine percent of respondents in the quarterly poll of investors, traders and analysts who subscribe to the Bloomberg terminal say New York will be the best place for financial services two years from now. Singapore is chosen by 17 percent of respondents and London is the pick of 16 percent. Shanghai has 11 percent, while Tokyo, once considered a global hub, gets the nod from only 1 percent.

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Bankers Expect Rising Bonus Pay to Break Records in Global Poll

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Published in Bloomberg October 30, 2009 by Robert Schmidt and Ian Katz
 
In Washington and on Main Street, politicians and voters are railing against Wall Street’s multi- million-dollar pay packages. In the financial world, most executives expect their bonuses to match or exceed last year’s, with 1 in 10 predicting their best-ever payout.
Having shaken off the biggest economic decline since the 1930s, almost three in five traders, analysts and fund managers believe their 2009 bonuses will either increase or won’t change, according to a quarterly poll of Bloomberg customers. Only one in four see a decline. Asians are the most optimistic about pay and Americans and Europeans somewhat less so.

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Employers Plan to Unfreeze Salaries, Yet Layoffs Still Loom

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Published in World at Work October 29, 2009 

Approximately half of the companies that froze salaries and hiring in the past year now plan to unfreeze them in the next six months, according to the latest update to an ongoing series of surveys.
Despite this change, employers continue to be concerned about their ability in the short- and long-term to attract and retain critical-skill employees, according to the surveys by Watson Wyatt. According to the survey, 54% of employers that froze salaries plan to unfreeze them within the next six months, a sharp increase from 33% in August and 17% in June. Almost half (49%) also plan to reverse hiring freezes at least partially in the next six months, compared with 38% two months ago.

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The Pay Czar Is Unconstitutional

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Published in The Wall Street Journal October 29, 2009, by Michael W. McConnell
 
Last week’s announcement that “Pay Czar” Kenneth Feinberg slashed compensation for executives at seven large financial firms by an average of 50% stunned Wall Street, stoked the fires of populist resentment, and troubled economists. Will this government-mandated pay cut drive the most talented professionals away from these companies, endangering their recovery? Does it augur further politicization of economic decisions?

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Crackdown on Executive Pay: Too Much or Not Enough?

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Published  in Knowledge@Wharton October 28, 2009


Last week, the Obama administration’s “pay czar,” Kenneth Feinberg, announced that the government will impose caps on compensation for the 25 highest-paid executives at seven companies that received “exceptional assistance” through the Troubled Asset Relief Program — including American International Group (AIG), Bank of America, Citigroup, Chrysler, Chrysler Financial, General Motors and GMAC. Under the new regulations, salaries will be reduced by an average of 90%, and total compensation (including bonuses and stock options) will be lowered by 50%. Knowledge@Wharton spoke with Wharton accounting professor Wayne R. Guay and then with finance professor Alex Edmans about what these changes could mean for Wall Street, company shareholders and taxpayers.

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Pay czar: Next ruling may carry more clout

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Published in CNN Money October 27, 2009, by Jennifer Liberto 

The next round of executive pay decisions for companies that have received substantial government bailout funds could have a more lasting impact on pay practices nationwide, the special master on pay for the bailout said Tuesday.
Kenneth Feinberg, the so-called pay czar of the Troubled Asset Relief Program (TARP), last week imposed caps on those who hold the top 25 positions at seven companies in which the government has a substantial stake, including AIG (AIG, Fortune 500), Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500). He also demanded that each of the bailed-out companies reduce compensation for the 25 highest-paid employees by an average 50%. 

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JPMorgan’s Dimon Says He Won’t Recruit Rivals’ Staff

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Published in Bloomberg October 27, 2009 by Elizabeth Hester
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he won’t actively recruit the best employees from competitors operating under pay restrictions imposed after federal bailouts.
“I morally have an issue with people going against those companies that are hamstrung,” Dimon said today at the Securities Industry and Financial Markets Association meeting in New York. “It’s wrong to say, ‘Let’s go hire the best people.’ We’re not going to do that.”

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Ahead of the Curve

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Expert Perspective by Grahall’s OmniMedia Editorial Board

It was likely with some relief that public companies heard on October 2, 2009 that the SEC would delay the implementation of Proxy Access Rule changes.  According to an article in Law360: “U.S. Securities and Exchange Commission Chairwoman Mary Schapiro said… that proposed changes to proxy access rules would not be finalized until 2010 at the earliest, following a deluge of comments to the regulator.” That’s one major issue set aside for now, but there are many more proxy changes poised for approval before the 2010 Proxy Season arrives. 
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Can We Breath A Sigh of Relief … YET?

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Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeIn early October, World at Work reported (Most Companies Actively Recruiting as Economy Improves) that a survey by BenchmarkPro showed “More than 90% of surveyed companies are actively recruiting personnel as the unemployment rate begins to level off and the economy begins to show signs of improvement.”
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Let Them Eat Cake

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Storm the Bastille!
Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeTwo articles last week draw stark attention to the growing economic disparity that exists in America between Main Street and Wall Street. 
Continue reading “Let Them Eat Cake” »

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