Wall Street’s bonus baby steps

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Published in CNN Money, December 30, 2009 by Collin Barr

So much for Wall Street sobering up.
Under pressure to prevent another meltdown, Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) have been cutting back on cash bonuses and insisting on so-called claw-backs — arrangements that allow companies to reclaim past bonuses when there is employee misconduct.
Yet for all their supposed reform-mindedness, the banks show no sign of pulling the emergency brake on the great compensation escalator.
A year after taxpayers saved the finance industry from collapse, the big banks will hand out billions of dollars in bonuses in the coming weeks — at a time where unemployment tops 10% and many people are still losing their homes to foreclosures. To say this rankles in some quarters is an understatement.

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