Kind of strange how, back in 1973 when the US was in an economical recession, that bonuses weren't given out that year on Wall Street.
Greed Is Good
1973 was a terrible year on Wall Street. An unexpected crisis in the Middle East led to a quadrupling of oil prices and a serious global economic
recession. The president was in serious trouble with Watergate. The S&P 500 index dropped 50% (after 23 years of rising markets), and much of Wall
Street fell deeply into the red. There were no profits, and therefore no bonuses.
I was a 35-year-old, nonpartner investment banker then and was horrified to learn that my annual take-home pay would be limited to my small salary,
which accounted for about a quarter of my previous year's income. Fortunately the partners decided to pay a small bonus out of their capital that
year to help employees like me get by.
This article goes on to speculate on how "Greed is Good", and the bonuses are what keeps the competition high and helps companies keep good
producing workers.
But it was the quote above that really caught my attention.
Funny how 35 years ago when their profits went down the tubes that bonuses were one of the first things that these companies cut.
BUT, fast forward 35 years, and now we have these companies begging for money from the taxpayers and then just turning around and giving it to their
employees as bonuses!
Managerial practices, and morals, sure have changed in 35 years!