Cuomo provides roadmap to Wall Street riches
Rob Cox
Cuomo/bonuses: Wall Street’s aspiring plutocrats may have an unlikely new saviour: Andrew Cuomo, New York’s attorney general. That may sound crazy. After all, he has been haranguing them all year, following in the footsteps of his predecessor in the job, Eliot Spitzer, who successfully turned investment bankers, research analysts and stock-brokers into pariahs - before becoming one himself.
Cuomo wouldn’t want to be regarded as an enabler of the get-rich-quick club. But his latest jab at the bonus culture, a report entitled “No Rhyme or Reason” released on Thursday, may do just that. The report does underline already well-rehearsed points about the role misguided incentives played in bringing the global banking system into a state of near collapse. But although worthy, it doesn't add much new to the debate.
That’s because the bulk of its findings consist of information already available in the public domain. One exception is a count of employees at each of the nine biggest commercial and investment banks in America who made $1 million or more, $2 million or more and so on in bonus last year. This may further incite the anti-bonus brigade - for example Citigroup, which needed several taxpayer rescues, still minted 738 millionaires last year.
But Cuomo has also provided a rare tip sheet to the best path to riches in the finance industry. That could be valuable to the best and brightest college students and the nation’s many job seekers – and it could help European and other foreign banks as they try to hang onto trading stars - or poach them from US banks.
A quick perusal of the report, subtitled “The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture”, reveals the odds of becoming rich are better at, say, JPMorgan than Bank of America. The New York bank led by Jamie Dimon paid 1,626 staffers $1 million or more. BofA, which employs more people altogether, paid just 172 employees that much – and only part of the differential is explained by Charlotte’s lower cost of living.
For those who think million-dollar bonuses are for losers, it helps to know that the chances of receiving $8 million or more a year are double at JPMorgan, where 27 individuals feasted on them, than they are at Citi, where only 13 lucky employees walked away with an eight-ball - or even Goldman Sachs, where 21 did. Cuomo may hate the prospect of up-and-coming Wall Streeters benefitting from his research. But at least he now knows where to look for campaign contributions.
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