Comments on: Shareholders – Not Obama – Should Be Curbing Wall Street Bonuses

By: Robert

Robert — Fri, 15 Jan 2010 15:27:51 +0000

You'll find fewer market participants dumber than bankers who THINK that they are traders. Those are the ones who would load up on oil at $147/barrel, silver at $20/ounce, and gold at $1200/ounce. We'll probably see them selling at $10/barrel, $3.50/ounce, and $250/ounce, if they aren't forced to liquidate sooner by margin calls. And if they aren't using your money on outright gambles like those, then they lent it to somebody with a job at McDonalds to buy a $50,000 house for $800,000 on credit, or lent it to Dubai to build an indoor snow ski slope or artificial islands. Some day we as a people are going to decide that banks once again risk exclusively their own capital and nobody else's.

By: Wally

Wally — Thu, 14 Jan 2010 03:02:40 +0000

While it is a great idea that shareholders control compensation and particularly bonuses, It is incredibly naive to even suggest that the individual investor who owns at most a few hundred shares can have any influence whatsover on those items. Maybe an institutional investor with a large number of shares (or better yet a group nof institutional investors) can exert some influence. What are they doing aobut this?

I agree that it is dangerous precedent to allow the government to influence compensation and bonuses for privately held businesses. But please, a small individual investor like myself and many others has, and I submit never will have, any influence on this issue. I choose not to buy stocks in companies that operate as we see most large banks now operating. This is one small investors influence, but it does no good whatsoever. The corporation doesn't care if I own the stock or not.

By: chris erickson

chris erickson — Thu, 14 Jan 2010 01:22:15 +0000

last year when things went to hell in hand basket , I stated they should only bail out the banks & wall street if the return was worth it , meaning that the banks , wall st etc , should have to pay a large portion of any profits made over the next 5 years back & the curb/lower their pay scale back to reality , instead we bailed them out and they are doing the same #$#@&%%$ sh-t now tha t they did before …

By: jere

jere — Thu, 14 Jan 2010 00:00:22 +0000

When I studied economics (long ago) we were told that Directors are supposed to represnt the shareholders, set policy, and hire managers. Management was to run the day-to day business. The only way I can see to break the incestuous conflict of interest created by permitting selecting director candidates and voting proxies for them. The maximum conflict of interest is the Chairman/CEO! Individual shareholders are powerless, so the fix will have to be:
Active involvment of institutional shareholders/mutual funds in selecting directors with
fiduciary responsability to share holders, or;
LEGISLATION: to prohibit management from soliciting/voting proxies or serving as directors and,
clearly establishing the binding fiduciary responsability of directors to shareholders.

By: George Buranyi

George Buranyi — Wed, 13 Jan 2010 22:14:46 +0000

One way of looking at this is that the shareholders of a larger entity called the United States are excercising their right to curb banker bonuses through their elected government. The banks have the privalege to operate within the domain owned by those shareholders but have acted in a manner that most shareholders of the US have found reprehensible.

By: Lisa

Lisa — Wed, 13 Jan 2010 21:36:19 +0000

The whole structure seems wrong. Individual investors are providing the capital for these traders to "gamble". If they win the trader keeps 50%. If they lose big enough (causing the company to go bankrupt) the investor loses it all. The trader really has no incentive NOT to gamble. GS management has pulled their money out and are now making money gambling. If they lose, they can just go start another company. Why are investors putting up with this?

By: ricecake

ricecake — Wed, 13 Jan 2010 20:11:27 +0000

i find your points are all self conflicted. Shareholders are part of the wall street too. They are all no less greedy and may be more so if giving the chances. This is including all the new letter writers who are giving investment advices. All such e-mail I received so far bombard my head with greedy bombs. You guys are the Greedy bunch.

By: Irv Rikon

Irv Rikon — Wed, 13 Jan 2010 17:54:04 +0000

Who are these "shareholders"? The average Joe and Jane who have 401ks and IRAs are diffused and scattered across the country, even overseas. If you can unite them, and through the internet you probably can, you have my vote.

By: Frank janesick

Frank janesick — Wed, 13 Jan 2010 16:54:52 +0000

I have voted against companies increasing the amount of stock outstanding for some
50 years. Been attending stockholder meetings for some 40 years. I thought when the USA passed a law (a company paying over one million to a employ) could not deduct the over million payment from the income tax, would help stock holders. This caused all kinds of stock options. Thusly deluting shareholders holdings and lining the pockets of company
officers. It seems to me, that every time a rule is made, the smarties figure a way around the rules meaning

By: Frank W

Frank W — Wed, 13 Jan 2010 16:31:18 +0000

Finally, someone really seems to understand the problem. When Wall Street firms were true partnerships, sharing the gains were usually limited to a small portion of the the trading gains because they understood that it in someways is a zero sum game. The big gains today are likely followed by big losses tomorrow.

That is why, during the 60s, 70s and part of the 80s, investment banks and commercial banks restricted the amount of capital available for trading.

You are exactly right that the bonuses are really the profits due the investors who take all of the risk. Under the present system, the traders take little or no personal risk and trade other people's money and keep a large share of the profits. It has been going on for a while and needs to stop. Someday institutional investors will wake up.