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Cold As Ice: Bonusless Wall Street Execs Called "Zeros"


By

Jen Chung

Published Dec 20, 2010

Modified Dec 20, 2010


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By

Jen Chung

Published Dec 20, 2010

Modified Dec 20, 2010


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Today, the NY Times looks at the plight of well-compensated financial executives who are having a cold holiday season. That's because they aren't getting a bonus this year (EVEN THOUGH THEIR BASE SALARIES HAVE INCREASED) and they're dubbed "the Zeros" by management. One senior executive says, "It’s a real headache," and to placate some whiners, "we’ll throw $20,000 or $25,000 at each of the Zeros so they’re not discouraged."

What happened is that the 2008 financial crisis made some firms realize they can't hand out extravagant bonuses. Instead, firms raised base salaries for the middle level rat-race schmoes, "At Goldman, for instance, the base salary for managing directors rose to $500,000 from $300,000, while at Morgan Stanley and Credit Suisse it jumped to $400,000 from $200,000." But the bonus mentality is so ingrained that the whole no-bonus situation is extremely difficult for people to face, especially as top executives may be getting $600,000-1,000,000 bonuses.

Another victim of the no-bonus epidemic: Impulse purchases, like sports cars, jewelry and real estate. Robert Yaro of the Regional Plan Association said, "I suspect there will be some pain in the short-term**. We’ve all heard the stories of someone showing up in Greenwich to buy a $10 million house and paying cash on the spot.** But in the long term, this is probably healthier for Wall Street and the regional economy. Wall Street shouldn’t be a casino." Oh, you think?

And in the immortal words of Vanilla Ice:

Tagged

base salary

bonus

compensation

financial firm

impulse buy

wall street

zeros


Jen Chung

Jen Chung is a former WNYC and Gothamist editor.

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Gothamist is funded by sponsors and member donations


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