Late Night FDL: The Dude Abides While the Clueless Abound
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One of the iconic movie lines/scenes from the ’90s is “The Dude Abides” from The Big Lebowski. I like to paraphrase as I did in the title of this post since there are so many levels of cluelessness that we see each and every day.
For example, there is this article from today’s LA Times on the pay package of Disney CEO Bob Iger:
Walt Disney Co. Chief Executive Bob Iger received nearly $31.4 million in total compensation last year, a 13.6% increase from 2010, according to a filing with the Securities and Exchange Commission.
The board’s compensation committee laid out the case for Iger’s package, noting that 90% is tied to Disney’s performance. It said the Burbank entertainment giant achieved record net income, revenue and earnings per share in fiscal 2011, and initiated a number of projects that would contribute to the company’s’ future growth — including expanding attractions at Disney theme parks in California, Florida and Hong Kong, and the joint venture to create a new park in Shanghai.
I had something tickle my memory when I saw that so I took a quick check of Der Google for “Disney layoffs.” Oops:
Amid a continuing industrywide slump in DVD sales, Walt Disney Studios issued layoff notices on Wednesday as part of a plan to shed about 200 jobs.
The cuts include an undisclosed number of layoffs and dozens of jobs that have been unfilled, primarily in the studio’s home entertainment division in Burbank, said a person familiar with the matter who was not authorized to comment.
Is there anyway possible for a CEO of a publicly traded company that is supposed to be having problems requiring job cuts to take a pay cut? How many jobs could have been saved at Disney if some of that CEO compensation went to save the jobs of those laid off?
Then I got to the New York Times. First I read this article titled, “The Dawn of Lower Pay on Wall St.”
The day of reckoning may be at hand.
This week, the venerable investment bank Morgan Stanley stunned a generation of Wall Street bankers and traders by announcing that it was capping cash bonuses for 2011 at $125,000. Its top executives, including the chief executive, James P. Gorman, and his management team, will receive zero cash. And the Republican presidential front-runner, Mitt Romney, reignited a national debate over taxing the rich and Wall Street pay by revealing that his tax rate was in the 15 percent range, joining the billionaire investor Warren E. Buffett among the ranks of the favored few who pay lower rates than people earning just a small fraction of their millions. Mr. Romney hasn’t revealed his tax returns or total income, but disclosure forms indicate he received $9.6 million in 2010 and part of 2011 and had a net worth in excess of $250 million, much of it derived from his days as head of the private equity firm Bain Capital.
For most people, $125,000 is a lot of money, and for people on Wall Street, the cash bonus comes on top of base pay that has increased in recent years. The average base pay for managing directors at Morgan Stanley has risen to $400,000 and to $600,000 at Goldman Sachs. Employees also earn large parts of their bonuses in deferred cash and stock.
But $125,000 is a pittance by Wall Street standards. Citigroup paid Andrew Hall, a star commodities trader, a bonus of $98 million in 2008, the year of the financial crisis. As recently as 2010, many traders and investment bankers were arguing over whether their yearly bonuses should be eight figures rather than seven. Compensation at the 25 largest firms hit a record $135 billion that year, according to an analysis by The Wall Street Journal.
Followed immediately by reading this article titled, “Bad Year for Wall St. Not Reflected in Chiefs’ Pay.”
Wall Street stocks and profits took a beating in 2011. But there is one corner of the Street that took a lighter hit: the compensation paid to chief executives.
Three big banks disclosed on Friday what their top executives will receive in deferred stock for their work in 2011. Such stock is expected to make up most of their bonus as banks are increasingly paying employees more in deferred stock. Those awards to top bank executives are coming as lower-level employees are finding out that their own bonuses will be much smaller than a year ago.
Using der Google once again, I searched “bank layoffs.” Again, it sure seems that if things are bad enough to lay people off, bonuses of any size should be questionable as it seems to reward failure and incompetence.
But in the end it was this article from the Times blog The Caucus that truly exemplified the cluelessness:
Kappa Beta Phi, an exclusive Wall Street fraternity whose members include big-name bankers, hedge fund billionaires and private equity titans, met at the St. Regis Hotel in Manhattan on Thursday night for its 80th annual black-tie dinner and induction ceremony.
As always, the event was held in strict secrecy, with members being told that “what happens at the St. Regis stays at the St. Regis.”
A reporter, however, was able to walk in unquestioned and observe the proceedings.
Neither a rough year in the financial markets nor the animus of the Occupy Wall Street movement was enough to dampen spirits at this year’s dinner, which was attended by members like Alan C. Greenberg, known as Ace, the former chairman of Bear Stearns; Robert H. Benmosche, the chairman of the American International Group; Meredith Whitney of the Whitney Advisory Group; and Martin Lipton, founding partner of the law firm Wachtell, Lipton, Rosen & Katz.
The Occupy movement was fodder for several after-dinner skits. In one, a documentary filmed during the protests, James Lebenthal, a bond specialist, joked with a protester whose face was appeared to be tattooed.
I’m wagering that next years “fraternity party” will probably have a skosh better security.
I did find this little tidbit about half way through the post to be quite explanatory to the ethos shown by these banksters:
Kappa Beta Phi, which started in 1929 as a group of Wall Street bigwigs whose social club was named as a send-up of Phi Beta Kappa, the honor society, has become a sort of upper-crust Friar’s Club roast.
My bold and I think that probably tells most of the tale right there. Today’s banksters are direct spiritual descendants of the mentality that gave us the Great Depression.
I guess it is probably more they don’t care than they are clueless but there are elements of both.
And the video is because I can.