These are really three different issues: 1) The CEO compensation; 2) Commission/P&L bonuses of profitable employees; 3) Misaligned compensation packages of the CDO/mortgage-backed buying managers.

The first one is a symbolic issue (and is irrelevant IMO) and the second one is perfectly appropriate — its the 3rd one that has become so problematic.

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2007senior-officer bonuses*/ total bonus pools** Bailout money 2008 Bonus Pools Merrill Lynch $85M/$9.5B $10B Reportedly, in December, just before Bank of America took over, John Thain quietly awarded $3 to $4 billion in bonuses, a month earlier than was customary. Bank of America $36M/$11.3B $15B The company granted 2008 retention bonuses to 6,200 Merrill brokers, and C.E.O. Ken Lewis declined to answer a question about this year’s bonuses at a shareholder meeting in December. Goldman Sachs $313M/$12.1B $10B Average compensation is reportedly down 45 percent in 2008 but will actually be a greater share of revenues than in 2007. Morgan Stanley $64M/$9.9B $10B The firm’s 2008 bonus pool is down 50 percent but is still estimated at $5 billion. Citigroup $54M/$20.7B $45B The ratio of compensation to revenues is reportedly not remarkably different for 2008. Wells Fargo $40M/$8B $25B C.E.O. John Stumpf and top executives have not said they will forgo their 2008 bonuses as of mid-January. J. P. Morgan Chase $91M/$13.6B $25B While net income was down 64 percent in 2008, bonuses are reported to be down only 30 to 50 percent. Total $683M/$85.1B $140B *Total of top five bonus packages (including stocks) received by highest-ranking officers. **Estimated as 60 percent of compensation where exact figures are not available.

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Source:

Bonus Babies: The Big Tarp Recipients and their Booty

Christopher Bateman

Vanity Fair, February 2, 2009, 10:00 AM

http://www.vanityfair.com/online/politics/2009/02/bonus-babies-the-big-tarp-recipients-and-their-booty.html

Wall Street’s $18.4 Billion Bonus

Michael Shnayerson

Vanity Fair, March 2009

http://www.vanityfair.com/politics/features/2009/03/wall-street-bonuses200903