Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Banks Get Creative to Dodge Bonus Limits

Favorable loans, options aid bonus-bereft execs

By Rob Quinn, Newser Staff

Posted Jan 29, 2010 5:07 AM CST

(Newser) – Banks chafing under pay and bonus restrictions are helping execs make ends meet with low-interest loans, no-collateral loans, and even loans that don't need to be paid back unless the employee leaves the firm. Favorable and forgivable loans are nothing new in the industry, but experts say in-house loans have become a lot more common since banks pledged to cut pay and bonuses.

Banks are also easing restrictions on employee share sales to assist execs, many of whom are now struggling to meet private school fees and mortgage payments on multimillion-dollar homes. "I know it sounds ridiculous to Main Street, but it's a hardship," the head of a New York financial services job-search firm tells the Wall Street Journal. "So firms are trying to help out any way they can."

[Images (1)]

[Quotes (1)]

Citigroup has capped most cash bonuses at $100,000 per employee but that doesn't count "deferred cash" awards. (Shutter Stock)

« Prev« Prev | Next »Next » Slideshow

You're seeing a lot more flavors of compensation and the way pay is structured. - Steven Eckhaus, a partner at law firm Katten Muchin Rosenman LLP

« Prev« Prev | Next »Next » Slideshow

CLICK BELOW TO VOTE

32%

54%

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

White Grandfather Cuffed for Walking With Black Granddaughter (NewsOne)

Man in Mugshot Explains Why He Has Half a Head (HuffPost)

These Exes Were Spotted Making Out … and That's a Bad Thing (Bleacher Report)

Help! I'm Having an Incestuous Relationship With My Twin (Slate)

Proof that Twitter Users are Sexier Than Facebook Users? (GeekSugar)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 10 comments

zackmasson

Jan 30, 2010 5:53 AM CST

Id have to have an iphone for this scenario. Fail.

zackmasson

Jan 29, 2010 9:16 AM CST

Makes me sick no person on this earth should be making millions a year unless they created a fucking iphone status product. These guys are wallstreet thugs.

SC23

Jan 29, 2010 9:01 AM CST

Is it just me that thinks they should be bending over backwards to thank us and not abuse us since we kept them from crumbling? And what do we get? I cant afford my jillion dollar home.. its such a hardship.. F/U. try working 40-60 hours a week for crap to barely make your bills and then talk to me about your "hardships"..

What's Popular Now on Facebook

Guy Buys $123 Safe on eBay, Finds Major Cash Inside

Study Finds Arsenic in Baby Formula, Cereal Bars

Wall Street Journal (Source Grid »)

Money

Citigroup • executive compensation • perk • loan • financial sector • executive bonuses • executive pay

More Newser Stories

Wall Street Bonuses to Plummet

Falling revenues behind expected 40% plunge

(NEWSER) - The latest news from Wall Street is likely to leave most ordinary Americans dry-eyed. Year-end bonuses for bankers and traders are expected to be down sharply this year, plunging up to 40% to their lowest level since the financial crisis, according to a closely watched industry forecast. A bond trader who is also a managing director at a top securities firm would have received a bonus of some $2.9 million last year, but will have to make do with $1.8 million this year, the Wall Street Journal reports. More»

CEO Bonuses Shoot Up 30.5%

Some shareholders express disapproval

(NEWSER) - So far, it’s looking like 2010 was a banner year for CEOs. An analysis of disclosures released by 50 major corporations reveals that the median CEO bonus jumped 30.5%, the Wall Street Journal reports, significantly outpacing the companies’ 19.4% median net income growth. Some of the biggest winners included the heads of Disney, Clorox, and Jabil Circuit. Starbucks' Howard Schultz walked away with a $3.5 million bonus, up from $1 million the year before. More»

Wall Street Hiring Jumps

Bonuses back in fashion as firms lure execs

(NEWSER) - Happy days are here again for Wall Street workers. The big banks have gone on a hiring spree over the last few months and competition for the best execs is heating up, sending salaries upwards and spurring firms to start offering perks and hefty bonuses again, Bloomberg reports. Recruiters say the size of guaranteed bonuses is edging up to pre-financial crisis levels. More»

White House Splits Hairs on Wall Street Bonuses

'Don't begrudge' line taken out of context: aides

(NEWSER) - The White House is in damage control mode after President Obama told a Bloomberg interviewer yesterday he didn't begrudge Wall Street bankers their bonuses. He also noted that Wall Streeters don't make as much as star baseball players. The quotes were overplayed to make it seem like he approved of massive bonuses, aides tell the Huffington Post , when the president was merely saying that he didn't fault anyone for their success. More»

Goldman May Force More to Donate to Charity

Face-saving program would be similar to 4% rule at Bear Stearns

(NEWSER) - As Goldman Sachs prepares to lavish spectacular bonuses on employees this month—based on record profits of about $12 billion for 2009—the investment bank is mulling a face-saving program that would require more employees to donate to charity. Goldman already has such a program, which targets about 400 top-earners. But the expanded plan would be more in line with that of the erstwhile Bear Stearns, which required upwards of 1,000 workers to be generous with 4% of their take. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Banks Get Creative to Dodge Bonus Limits