To Americans that are struggling to make a living, the outrageous amounts of money that Wall Street executives receive in the form of salaries and bonuses seem excessive and unnecessary. However, Brian Griffiths, an international adviser for Goldman Sachs, has stated that such high executive compensation is helpful to all Americans.
Goldman Sachs is getting ready for a year that will see the company set aside an almost record-setting amount of money for the compensation of its executives. $16.7 billion will go to Goldman employees, an amount that increased 46 percent from a year earlier and one that is enough for …read more

Insurance risk company Verisk has managed to secure the largest initial public offering of 2009, valuing the company at a whopping $22 per share for its 85.25 million shares. This sits above the analyst-expected price range of $19 to $21 per share for the same amount of shares and establishes Verisk as a new force to be reckoned with in the insurance risk field.
These shares are expected to start being traded on Wednesday on the NASDAQ Stock Market under the symbol VRSK. The total value of the IPO clocks in at $1.88 billion, which is the largest IPO in the …read more

Recently, the Obama Administration expressed its desire to complete a regulatory overhaul of the financial system. As part of that overhaul, some are considering that regulators may need more power to limit bank bonuses.
Tying bank executive bonuses to risk
One of the issues right now is the fact that executive bonuses are not usually tied to risk. This means that bank executives could get paid big bucks for moves that may mean immediate profits, but bring on added risk down the road — risk that could lead a financial market meltdown like we saw last year. The scrutiny comes as severance …read more

On the ignominious anniversary of the failure of Lehman Brothers and the onset of the economic crisis, President Obama delivered a strong message to Wall Street. In order to prevent another financial crisis of the same size, Obama encouraged that the industry should take steps to reform and patrol itself and to not try to get around new laws intended to police Wall Street.
 
Obama’s main message was that, despite the fact that the economy and our financial systems continue to show signs of recovery, Wall Street should not have the right to continue acting recklessly in ways that put us …read more

President Obama prepares to try and convince the country that prudent, simple regulations can protect us from another major financial meltdown.

As the Securities and Exchange Commission continues to clamp down on unscrupulous Wall Street denizens, Chairman Mary Schapiro has written an open letter to U.S. investment CEOs that warns against using bonuses to compensate brokers. According to Schapiro, such a practice encourages brokers to aim for more sales at the expense of the customer’s interest.
 
In her letter, Schapiro took note of recent news stories that revealed many CEOs using increased commissions and upfront bonuses to hire brokers, warning that such a practice ends up benefiting the broker more than the customer. By giving brokers large bonuses, Schapiro argues, the brokers …read more

Everyone likes a good profit story. And Intel is providing one. As the Dow and the S&P 500 head lower this morning, Intel has the Nasdaq hanging on in the black. Intel announced that its forecast for third-quarter revenue beats the Wall Street expectations. This is a sign that things are improving for the large chip maker, and it could mean that the technology sector is ready to move out of its slump.
Technology is one of those things hit hard by drops in consumer spending. When consumers are not confident about the economy, they often decide that technology projects are …read more

Signs of economic recovery are appearing, but it will still be a long haul.

Wall Street is rallying, but is the party starting too early?

Just as the financial crisis reached its climax, the public was outraged to discover the unbelievably excessive bonus compensations that many Wall Street executives were taking as the rest of the country suffered. Now, the House Financial Services Committee has approved a bill given federal regulators the power to ban incentive pay at banks and shareholders the ability to vote on bonuses.
 
Under the proposed legislation, the Securities Exchange Commission to prevent any compensation practices that would end up constituting excessive risk. However, the bill still must be approved by the House and the Senate before it gets viewed by the …read more