Wall St. executives are apparently in for their best pay day in history, despite the fact that the collapse of the credit markets and the beginning of one of the worst recessions in US history are barely a year old. Goldman Sachs (NYSE:GS) posted record profits for its fiscal year and it is anticipated that a number of partners there will make tens of millions of dollars. Outside analysts expect the Goldman comp poll will be about $22 billion which is over $700,00o for each person at the investment bank.
The huge Wall St. pay packages may push Congress to attempt to limit financial executive pay. The Treasury has already appointed a pay czar to limited compensation among senior management at financial firms which have not paid back TARP funds. The Fed may begin to offer guidance to companies that it regulates, in part to cut down risky behavior that sometimes results in short-term profits.
Many public companies have cut top management pay has profits have been undermined by the recession. Many chief executives will also lose a big portion of their compensations because the value of their stock options has been destroyed by the falling market.
One place that pay limits do not seem to have reached is universities. A new study by the Chronicle of Higher Education shows that 23 college presidents made over $1 million in the 2007-2008 fiscal year. Based on data released by Harvard, Yale, and other elite universities, these extravagant payments were made during the same period that many educational institutions lost a large part of their endowments in the stock market meltdown. Read More »
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