2008/11/18
bonus outrage, price transparency
GS chief gives up bonus for now… Some more discussion here and here.
Here is a money quote (pun intended):
There are instances where bonuses are justified, deserved, and in the best interests of the investment bank involved. Your very best people are people you want to hold, and your very best people will have opportunities even in this environment to transfer allegiance.
So the rationale behind the pay structure, allegedly, is to use the bonus as a kind of bribe money, to keep proprietary information (some term it “talent”, laugh) locked up within one firm. So in a way, bonuses have gotten far away from being a performance incentive.
(Read the article)
