Decius wrote:

Each of the firm's 443 partners is on course to pocket an average Christmas bonus of more than £3million.

The size of the pay pool comfortably dwarfs the £6.1billion lifeline which the U.S. government is throwing to Goldman as part of its £430billion bail-out.

Yes, this is an outrage, but I think there's some errors here.

For one, most bonus pools in publicly traded companies are not made out of money that is "touchable". Meaning the by-laws of the company or the bonus plan prohibit the company from taking that money and applying it to earnings to shore up a bad quarter or fiscal year. So the money that's coming from the US Government is not indeed "going right to the employees and partners" as the article states. It is most likely already banked and sitting in some other kind of investment vehicle, typically a sweep account, or treasuries. And it is made from previous earnings, dubious as they may be.

Secondly, the boards of all of these firms should be hanged. Period. Their fiduciary responsibility is to ensure ethical behavior on the part of management and to maintain that shareholders come first. When management takes home $14B in bonuses and shareholders get fucked, then the board has failed in its responsibility. Yes, it's criminal, because the loss of value to shareholders is many orders of magnitude beyond what management's loss is. Management is taking home a cash bonus, and still has a job. Your grandmother, who's invested in Goldman, is now missing an income stream and dividend.

Finally, in all of this, like so many things, the details are lost due to the sheer rage and anger that greed inspires. Yes, these people are rich. Most are wealthy. When you are pocketing a $7M annual bonus (that's down 30% from previous years), which is more than an average American worker will make in her lifetime, it makes sense to be angry. That person could take their bonus, invest it in muni bonds or CD's and make over $500K a year.

But what gets lost in this vitriol about capping compensation and reigning in the greed is that people need incentives to perform their best work. I'm not saying that Wall Street isn't filled with douchenozzles that simply went to the right college and sucked the right cocks in their careers to get amply paid. That's true. But when you're delivering 10's of billions of dollars of value to someone else, then you should be duly compensated.

It's not the compensation for performance that's the problem. It's the mechanisms that the boards agree to in order to dole out that compensation. It should hurt just as much as it feels good. Carrot AND stick. You shouldn't get a golden parachute for destroying value. But I have no problem with you getting a ton of money for creating value. It's no different than Michael Jordan getting paid a lot of money for playing basketball so well. If he's getting paid so well, it's because the owner of the Bulls got paid even more. That's the way it should work. If he suddenly got strung out on crack and couldn't perform, then oh well. Bye bye income.

The boards of these firms need to be indicted. Stop rewarding for shoddy performance and unsustainable profits. But don't put a ceiling on people who need to drive as far as they can.