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Wall Street’s New Mousetrap?

Posted by Larry Doyle on March 17, 2009 11:33 AM |

Populist outrage is growing at the egregious bonus payments made at firms which took government money. Not every firm voluntarily took government money and, in my opinion, should not be restricted by government controls over bonus payments. However, the entry of the government into the financial industry is quickly creating a sea change in Wall Street’s outlook on compensation.

Is Wall Street working on building a better mousetrap to sidestep the government’s involvement? You can bet on it.  Wall Street Pursues Pay Loopholes highlights some of the early maneuvers firms are looking to make to address this issue.

The onus should be put on the Board of Directors of these companies along with their senior executives to properly align net income, residual risks, and total compensation. In all honesty, this is not a difficult process but it requires a level of integrity and moral fiber on behalf of the boards and senior management across Wall Street to make it happen.

Will the Wall Street money machine buy Washington once again so that firms with significant government capital can “beat the system?”

Sense on Cents will be watching very closely!

LD






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