[quote=footsoldier]The real problem with bonuses is that it handcuffs the advisor for the period of the payback and then forces the advisor either to find a new firm who will pay recruiting bonus or the existing firm pays the retention bonus.

First, footsoldier - get a job!  Your obviously on the dole and have no idea about working for a living.  You get paid to work - you generate $1 and the company pays you .40 cents - they take .60 - they pay you a bit to come over for the privilege of taking your .60 cents. If they don’t many others would love that .60 cents so they’d pay you. 

The people that have jobs and generate value get paid for it.  People that work for a living understand the concept…naturally you don’t.   Anyway

Recent news story:



A growing number of healthy bank chains across the country are bailing out of
the $700-billion federal banking bailout program, saying it has tarnished the
reputation of banks that took the money and tangled them in unwieldy
regulations.



When the program began last fall, it was billed by
then-Treasury Secretary Henry M. Paulson as an investment in strong banks to
make them even stronger. (end of news article)



…And, there were no strings attached - just repayment and an interest rate.



Now that comrade Obama and his band of lackeys are in charge, those
loans come with a 90% tax on some of your key employees.  I wonder how
much UBS would have paid for that legislation affecting every one of
its competitors. 



Even though I disagree with the legislation to my core - all these
legislators salivating like starving dogs in front of fat steaks - and
that includes the republicans that are complicit – at the idea of
being able to pass a 90% tax on anyone - - welll…



I can’t help but feel real happy that one top person who shall remain
nameless - from a company that recently promised some retention for
some 5 months - promissing an announcement every two weeks or so - and
then canned it and told the troops to go sell financial plans when many
other alternatives had gone away - and then that person (among others)
gave themselves hefty multi-million dollar retention bonuses  and then
bragged to a disheartened work force about how many top recruits they
recently bought with the billions of dollars they just saved in
retention - well that person - who shall remain nameless is probably
going to have to pay those millions of dollars he paid himself - right
back to the government and thus get nothing.  How’s it feel?



So, what was said about the Nazi’s in Germany?  Something like first
they came for one group - no bother to me.  Then another group - well
who cares - no bother to me – then another group - well too bad - not
my problem - and then they came for me.  So don’t think there not going
to tax recruitment bonuses - they surely will - would you anticipate
these thieves would look the other way at the potential for billions in
additional tax receipts!  No way - you should have stayed at the firm
you were with – Barney Frank thanks you.



This is fear and conquer campaign.  It’s designed to scare the hell out
of people so they will willing go along with something billed as a
cure.  It’s a campaign to then make people dependent on goverment by SS
disability - SS payments - two years of unemployment insurance -
massive taxes on productivity - Food Stamps - Welfare and countless
other pay for people to be non-productive programs.  Then take all
those people who are now helpless and make them vote for big
government. 



It’s a curse and an opportunity - if you work through it - you have
less and less competition to think about.  In my opinion there is huge
money to be made in difficult environments - you just have to take
advantage and think big.

I just spoke to an attorney and regarding the recruitment contracts-  all payments are loans until they are earned each year according to the corresponding bonus payments.  

I have a job. I run an indy shop. I don’t get bonuses unless I earn them. I don’'t run to the next firm for a check. I have been in this biz since 92 and what I see has made me conclude that they frankly deserve the regulation for their stupidity. I do agree that what the government is doing is ludicrous, creates serious precedents, but I can’t help but think if they had only self regulated themselves…none of this had to happen. Greed, stupidity and arrogance.

Sometimes there are valid reasons why people need to move to another firm and it is a difficult thing to do but there are many times it is done for the right reasons.

[quote=footsoldier]I have a job. I run an indy shop. I don’t get bonuses unless I earn them. I don’'t run to the next firm for a check. I have been in this biz since 92 and what I see has made me conclude that they frankly deserve the regulation for their stupidity. I do agree that what the government is doing is ludicrous, creates serious precedents, but I can’t help but think if they had only self regulated themselves…none of this had to happen. Greed, stupidity and arrogance.

Another point, keep in mind that retention and recruiting bonuses are a business decsion these firms make.  Take a look at the cost of hiring and training a retail broker.  I would bet that the average wirehouse has 150k in salary and training expenses the first couple years, and many of these people will fail.  It is much more profitable to pay a 500k producer to transfer, then to keep hiring trainees that fail, and many of the recruiting bonuses are based on the assets you transfer and the production you generate. 

I don’t know why you’re all trying to convince FOOT of something that even child could understand. Do you really believe this will be the end of the “new” wave of anti success laws. I agree with BlueChip, everything that this country was built on…you remember the American dream, go to school, work hard, become succesful, and yes with success comes financial reward…well our goverment has decided how succesful we should be allowed to become…250k a year. If you’re naive enough to believe that this is all about TARP dollars then you need to read world history. Do you think as our “Govt” looks to overhaul healthcare…Doctors won’t come under the microscope…why should one doctor in Vt make 75k a year and some hot shot in NYC makes 1.5m a year…(they’re supported by tax payer dollars throught medical programs)lets average them out 250k a year, that sounds about right. As far as being an independent in this business, you have to be competley out of touch in a post MADOFF era if you think you’ll be allowed to operate the way you always have without so much regulation and oversight. That you probably won’t be able to afford to remain independent. They just haven’t gotten to you yet. Yes, our firms have taken TARP money…but how many 100’s of billions of dollars have these firms paid in taxes over the past 25 years…No one in Govt seemed to mind when the dollars where rolling in, no one even thought of asking how is all this revenue being created. As far as your point how does it help the client or the shareholder? My clients are successful business people, they don’t like what they’ve seen happen but the can make the distinction between what happend on the investment banking end and the recurring revenue of a financial planning practice…that has real value and those people SHOULD be paid. As far as shareholder, they will never recover thier “investment” if they are not allowed to keep quality people…yeah lets put some 65k a year bookeeper in that AIG spot. Wake up FOOT… the American Dream is being rewritten by our new Govt…oh yeah and their not interested in your opinion of what it should be…its not our choice anymore.   Enough Said I’m Done.

Suppose over November, a hedge fund had stepped up to save Citigroup.  Then, they declared that there would be no bonuses paid until their investment had started to bear fruit.  Anyone have a problem with that?

These firms sent their top execs around the world with a cup in their hand, raising capital whenever and wherever they could at usurious rates.  In October, the music stopped completely, and the only institution with deep enough pockets was the US Treasury.  And as soon as you cash a government check, you’ll be answering to them.

Nobody’s telling you that you can’t make your $500,000+ a year.  Or a million.  Just don’t do it with bonuses at a firm that is hundreds of billions of dollars in hock to the US government.  Up to me, these lousy firms wouldn’t have been allowed to survive at all.  They were insolvent, functionally bankrupt.  And if you really believe that Main Street America gives a damn about Wall Street execs having their bonuses cut, you need to get outside your bubble awhile.

If they didn’t survive, they wouldn’t get bonuses.  However, in this case, the government elected to let them  survive and the government did know in advance that these bonuses were going to be paid.  The government can cap pay at $6/hour at AIG if they want to do so.   What they shouldn’t be able to do is to take away income that was promised to employees after the fact.  Employees took the job/ stayed at the job knowing that they would get paid.  The alternative would have been to simply pay them much higher salaries instead of calling them bonuses.  Of course, that would have let the employees quit at any time.

Am I missing something about these bonuses? 

I work at AIG.  I have a lazy wife.  She sits on her butt eating bonbons.  If I make $150,000 + $100,000 bonus, I will make $250,000 and won't have an issue.

Here is an interesting thought.  If AGE brokers took the retention in monthly installments instead of the  upfront, are these payments now subject to the 90% tax if the bonus puts the broker over $250m?  Food for thought.

Q: What is the goal of Obama and Co. by whipping up all this ill will toward Wall St ?I know it's political, but what do they gain in the end  by making enemies with the industry that enables entrepreneurship and will help return prosperity? It seems like political suicide if they succeed in suffocating the financial services industry- very surreal.

[quote=oldpruguy]

Q: What is the goal of Obama and Co. by whipping up all this ill will toward Wall St ?I know it’s political, but what do they gain in the end  by making enemies with the industry that enables entrepreneurship and will help return prosperity? It seems like political suicide if they succeed in suffocating the financial services industry- very surreal.

[quote=Blitzkrieg Bop] [quote=oldpruguy]

Q: What is the goal of Obama and Co. by whipping up all this ill will toward Wall St ?I know it's political, but what do they gain in the end  by making enemies with the industry that enables entrepreneurship and will help return prosperity? It seems like political suicide if they succeed in suffocating the financial services industry- very surreal.

Suppose over November, a hedge fund had stepped up to save Citigroup.  Then, they declared that there would be no bonuses paid until their investment had started to bear fruit.  Anyone have a problem with that?

These firms sent their top execs around the world with a cup in their hand, raising capital whenever and wherever they could at usurious rates.  In October, the music stopped completely, and the only institution with deep enough pockets was the US Treasury.  And as soon as you cash a government check, you’ll be answering to them.

Nobody’s telling you that you can’t make your $500,000+ a year.  Or a million.  Just don’t do it with bonuses at a firm that is hundreds of billions of dollars in hock to the US government.  Up to me, these lousy firms wouldn’t have been allowed to survive at all.  They were insolvent, functionally bankrupt.  And if you really believe that Main Street America gives a damn about Wall Street execs having their bonuses cut, you need to get outside your bubble awhile.

[quote=oldpruguy]

Q: What is the goal of Obama and Co. by whipping up all this ill will toward Wall St ?I know it’s political, but what do they gain in the end  by making enemies with the industry that enables entrepreneurship and will help return prosperity? It seems like political suicide if they succeed in suffocating the financial services industry- very surreal.

No, the point is that had the government not stepped in with over a trillion dollars–and counting–these firms would be gone.  And instead of bitching about whether or not bonuses over $250,000 would be taxed, every single person in every single branch in the country would be looking for another job.

Suits me fine to have no government involvement at all.  No money, no heavy hand, no late-night emergency meetings between the heads of these investment and money-center banks and Treasury and Fed officials.  But that cuts both ways.  The only institution on planet earth that is collectively more stupid than Wall Street is the dumbasses who sit on those Congressional committees, and they happen to be the ones cutting the checks your way.

I know a lot of financial advisors who believe we should let GM go bankrupt.  In fact, I do.  But it’s a whole lot easier for an FA to get a fresh start after leaving Lehman or Bear or Merrill or MS or SB, than it is for a guy whose work experience involves screwing on bumpers for trucks nobody wants.  You have a book of business?  Leave, take your clients with you, and quit expecting taxpayers nervous about their own $45,000 jobs to be concerned about your $500k retention bonus to keep you at a bankrupt company for another year or two.

“No, the point is that had the government not stepped in with over a trillion dollars–and counting–these firms would be gone.  And instead of bitching about whether or not bonuses over $250,000 would be taxed, every single person in every single branch in the country would be looking for another job.”

If these firms are saved and the government gets their money back, is there a provision in this 90% tax that will give the money back to these employees?  If the government ends up making money on this, do the employees get their bonuses back plus an extra bonus?  Why doesn’t this work both ways?