Bank Bonuses: The ‘Fat Cats’ Try to Look Slimmer

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Pubished in Business Week December 16, 2009, by Ian Katz and Christine Harper
 
December has been tough for the global banking elite. First Britain’s Chancellor of the Exchequer, Alistair Darling, slapped a 50% tax on bonuses paid to bankers. Then, days later, President Barack Obama chided “fat-cat bankers” on national television in the U.S. On Dec. 14, Wall Street began cranking up its PR machine to contain the damage, sending U.S. Bancorp (USB) CEO Richard Davis—a lesser-known, lesser-paid member of its ranks—to address reporters in Washington. America’s top bankers, he said, “agreed very much” with the President “on the principles of executive compensation,” adding that they “are looking forward to you seeing the good efforts we’ve taken in the last couple of months.”
But a close look at Goldman Sachs’ (GS) recent maneuvers shows that some of the changes in pay practices on Wall Street are more stylistic than substantive. Goldman, the target of so much animus in recent months, has led Wall Street’s charge to get back in Main Street’s good graces; on Dec. 10 the firm announced it would pay its top 30 executives annual bonuses solely in restricted stock that can’t be sold for five years.

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