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A "risky" loophole for executive bonuses?

August 24, 2009 - Mike Maneval

The Treasury Department is reviewing executive bonus proposals for seven companies that took billions in federal bailout money, but anyone who thinks the insulting excess seen last March will completely be rolled back should dampen their optimism: A report by Lisa Lerer and Victoria McGrane for politico.com suggests Wall Street will resist and, in Lerer and McGrane's words, "guaranteed multimillion dollar payments, untethered to company performance, are making a resurgence on Wall Street."

Wall Street executives, according to politico.com, continue to argue that cutting the exorbitant salaries will drive the most productive talent away in ways their employers' growing dependence on taxpayers apparently hasn't. White House Press Secretary Robert Gibbs also gave a troubling answer, suggesting its not the compensation packages which are aggravating but the perception of reckless practices. Likewise, U.S. House-authored regulation to curb Wall Street's excesses is also contigent on "inappropriate risks."

The question whose answer will unfold in the coming months is: Will past Wall Street pay practices continue as long as definitions of risk can be finessed enough? 

 
 

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