Editorial note: If you have not yet read our mission statement above, please do so in order that you can put our blogs in context.
7 October 2012
Hats off to James Gorman, head honcho of US investment bank Morgan Stanley, for telling it like it is.
It’s not often that Antigone1984 sings a paean of praise to a Wall Street gombeen man.
But Morgan Stanley chief executive Gorman has broken ranks with his fat cat peers to attack stratospheric pay levels – in Wall Street, no less.
The standard downtown line is that high pay is necessary to attract the best talent (presumably they mean the financial whizz kids who engineered the financial crash that triggered the current worldwide recession).
He told the Financial Times: “Compensation is way too high. As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.”
Morgan Stanley itself is shedding jobs and cutting pay.
In a report in the London Guardian on 6 October 2012, Gorman said that in the past bankers’ pay had always increased with revenues, but never came down when revenues fell.
“That’s a classic Wall Street case of ‘heads I win; tails you lose’,” he said.
The Guardian points out that Gorman’s comments follow announcements from a string of European banks ceding to pressure from shareholders over pay. According to the paper, Deutsche Bank said last month that it was cutting bonuses and would spend less of its revenue on pay. UBS reportedly said it was considering capping bonuses and linking them to the bank’s profitability.
You might perhaps care to view some of our earlier posts. For instance:
1. Why? or How? That is the question(3 Jan 2012)
2. Partitocracy v. Democracy (20 July 2012)
3. The shoddiest possible goods at the highest possible prices(2 Feb 2012)
4. Capitalism in practice (4 July 2012)
5.Ladder (21 June 2012)
6. A tale of two cities (1) (6 June 2012)
7. A tale of two cities (2) (7 June 2012)
8. Where’s the beef? Ontology and tinned meat(31 Jan 2012)
Every so often we shall change this sample of previously published posts.