Wall Street giant Goldman Sachs has set aside $5.35bn to cover pay and bonuses for the quarter, an average payout of $172,581 per worker, after reporting better-than-expected profits between July and September. The bank's profits for the period were $3.19bn (£1.96bn), a four-fold increase from the same period in 2008.
Meanwhile another US banking conglomerate, JPMorgan Chase (JPM) announced $3.59bn (£2.25bn) in profits, and has set aside $7.3bn to pay staff. It is said that the pay and bonus packages will average around £300,000 this year.
Should we be angry about bonuses?
To most people not involved with the financial services industry, the news from Goldman Sachs & JPM will look like capitalism at it's most obscene. A year after the banks were bailed out by taxpayers to cover their losses, it appears the very people who caused the crisis in the first place are receiving unjust and obscene rewards.
However big bonuses were not the cause of the problem; it was a symptom of the irresponsible practices that led to the near-meltdown of the global financial system.
Also if these banks don't pay bonuses, then their best staff will vote with their feet and simply leave. This week, a spokesman for the Royal Bank of Scotland Group (RBS) confirmed a story in the Financial Times that 20 key managers at RBS Coutts Singapore resigned along with around 50 support staff in a move the newspaper said could be related to a lack of annual bonus prospects.
Third of staff at RBS Coutts Singapore quit
Finally, it is understandable that people are angry about banks paying bonuses on this scale, but not everyone who works in the City of London, Canary Wharf or Wall Street earn mega-wages.
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