Ah, late December. For years now, if you were part of America’s financial services industry, this was the time of big, beautiful bonuses.
Gigantic bonuses. Billions in bonuses that built palatial mansions and sucked bright young Americans into Wall Street and numbers crunching. This was compensation so big that it changed the basic distribution of income in this country and built a towering cliff of super-rich money mavens.
And then, the money mavens seemed to drive the whole U.S. economy off a cliff.
Were the incentives wrong? This hour, On Point: Huge pay, huge bonuses, and where they brought us.
Louise Story, business reporter for The New York Times. Her big story last week was headlined “On Wall Street, Bonuses, Not Profits, Were Real.” She also reports on how banks are trying to find new ways to handle bonuses.
Lucian Bebchuck, professor of law, economics, and finance and director of the Program on Corporate Governance at Harvard Law School. He’s the author of “Pay without Performance: The Unfulfilled Promise of Executive Compensation.”
Steven Kaplan, professor of entrepreneurship and finance at the University of Chicago Business School.