Wall Street gives out big bonuses to executives, despite mortgage-related losses

This is off MSNBC News:

NEW YORK - This might have been one of Wall Street's most dismal years in a decade, but that hasn't stopped bonus checks from rising an average of 14 percent.

Four of the biggest U.S. investment banks — Goldman Sachs Group Inc., Morgan Stanley, Lehman Brothers Holdings Inc. and Bear Stearns Cos. — will pay out about $49.6 billion in compensation this year. Of that, bonuses are traditionally estimated to represent 60 percent, or almost $30 billion.

But that might not sit well with investors who held on to investment bank stocks this year _ and watched them plunge by up to 45 percent. Investment houses have been slammed by the credit crisis, and top executives this past week said they've yet to see a bottom.

Further, some of those executives have even agreed to forgo their bonuses this year to reflect the poor performance. Morgan Stanley CEO John Mack and Bear Stearns CEO Jimmy Cayne won't be collecting their payouts.

Mack received no cash bonus a year ago but received stock and options worth an estimated $40.2 million, well above his $800,000 base pay. Cayne received a bonus of $33.6 million in 2006 and base pay of $250,000.

Goldman Sachs CEO Lloyd Blankfein reportedly is in line for a bonus of up to $70 million this year, as the nation's largest investment bank has largely navigated past any mortgage-related losses. Lehman Brothers' CEO Richard Fuld was granted a $35 million stock bonus for 2007, up 4 percent from last year.

Apparently the greed on Wall Street is still going strong, despite the big losses in the financial sector due to the subprime mortgage meltdown. In one sense, I am not surprised. Because greed is the only thing that Wall Street cares about--Greed is good!

Now I understand that greed has a place in our economic system. It is greed that makes people invest time, money, and labor in creating and working in companies to provide products and services for society. And that is understandable. But I have to seriously question how far should Wall Street's greed go in this country that is experiencing such problems and hardship? You have these investment banks that have lost billions in shareholder equity due to the banks' over-speculation into the subprime mortgage markets. And the shareholders of these investment banks were probably just as greedy in buying up financial stocks as the investment banks were churning out huge profits during the housing boom. But these shareholders have paid the price for their greed in the loss of their equity. Wall Street firms have not learned that lesson--they are still paying out almost $50 billion in compensation and bonuses to their employees.

The racket continues on.