Thursday, April 24, 2008

mediocre talent - rich rewards

"At the heart of many of Wall Street's problems has been a serious misalignment between the interests of managers and shareholders. It's clear a number of investment banks overlooked basic risk controls in their drive to increase profits. This pattern of behaviour has been exacerbated by a remuneration structure which has encouraged some employees to take spectacular short-term risks, confident that if things work out well they will reap huge rewards, and that if they don't they won't be around to pay the price." - said Richard Lambert , director general of the CBI

The bonus culture has turned thousands of relatively mediocre performers in the banking industry into multi-millionaires, while top performers have earned vast sums. The head of Barclays investment banking, Bob Diamond, was paid £36m last year even though Barclays took a £1.6bn hit from the US sub-prime crisis.

1 comment:

Renegade Eye said...

I think the quick big profit, will be a thing of the past.

The depth of the recession so far, has even caught the left off guard.

I'm not saying the system will fall, but it's having effects quicker and more severe, than many would predict.