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If Congress expects to derail financial firms paying out bonuses this year, they'd better gird for a fight, say industry experts who think Wall Street's CEOs are likely to hunker down and dole out the billions that their troops expect to be paid in 2008.
John Gutfreund, the former CEO of Salomon Brothers Inc. and now
president of Gutfreund & Co., told Bloomberg that the chances of
Wall Street not paying bonuses this year were "slim to none," in spite
of growing political opposition and write-downs in the billions.
The news service quotes Gutfreund and Fred Joseph, the former CEO of Drexel Burnham Lambert Inc. and current co-head of Morgan Joseph & Co., as saying that Wall Street will risk a backlash and pay bonuses, although at a highly reduced level to record cash paid out in 2007. "There will be bonuses this year, but I think they may be reduced by a larger percentage," Joesph told Bloomberg. Gutfreund added, "I'm sure there are creative ways. There are all kinds of devices to cover yourself in terms of paying people." In just the last week, a virtual parade of lawmakers has jumped on an anti-bonus bandwagon, including Speaker of the House Nancy Pelosi and powerful committee chairmen like Barney Frank, Henry Waxman and Dennis Kucinich as well as Senator Majority Leader Harry Reid, Sen. Jim Webb and Maine Republican Sen. Olympia Snowe. The New York Attorney General Andrew Cuomo also dived into the fray Wednesday, asking for details on Wall Street firm's compensation plans. - George White See Bloomberg story See Dealscape post on reduced bonus pools See Dealscape post on Pelosi/Reid commnets See Dealscape post on Andrew Cuomo demands See Dealscape post on Waxman comments See Dealscape post on Barney Frank call for moratorium Categories Deal Video
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