This might make you cry...

grizzly1911

It’s bonus season in America, and at the nation’s biggest and most prestigious law firms, associates—attorneys who do not hold equity in the firms they work for—will be receiving year end checks greater than the full salaries of many of their contemporaries. Cravath, Swaine & Moore, which sets the market for many top New York firms, announced in late November that its bonuses will range from $10,000 for the most junior associates to $60,000 for those closest to the partner level.

That’s still a far cry from the levels before the financial meltdown: In 2007, senior associates got $110,000 on top of their annual salaries. But no one’s making as much as they used to, and the bonuses are way up from 2011, when the top payout was $37,000. So this lucky group should be out celebrating at some stodgy lawyer bar. Right?

Not quite. In a twist that will probably delight the 99 percent, these associates, who are in the top 2 percent of wage earners in the country, are getting economically squeezed by other, more important lawyers who are in the top 1 percent. That’s because the partners who own these law firms—most of whom have seen their profits rebound to pre-recession heights—are hoarding a bigger share of the pie than ever before. Yep, the older lawyers who helped structure the instruments that wrecked the economy in the first place and who constantly give sound bites about how worried they are about business prospects are sitting like dragons a top piles of cash.



Dickens would have a field day.

:snow_laug

Eellogofusciouhipoppokunu

If they were giving bonuses with public money, then I'd have a problem. How a private company chooses to pay its staff doesn't really bother me, certainly not enough to elicit an emotional reaction.

Indeed, it seems good business sense to pay a lower annual salary topped up by a performance related bonus. If the firm is doing well, then everyone gets a cut of the success, if the firm is doing badly then the salary overheads are low.

somethingcorporate

Eellogofusciouhipoppokunu wrote: »

If they were giving bonuses with public money, then I'd have a problem. How a private company chooses to pay its staff doesn't really bother me, certainly not enough to elicit an emotional reaction.

Indeed, it seems good business sense to pay a lower annual salary topped up by a performance related bonus. If the firm is doing well, then everyone gets a cut of the success, if the firm is doing badly then the salary overheads are low.

I think the point is that regardless of how the firm is performing those sat at the top of the pile will do well regardless.

We see this in the UK too - loads of companies giving 2-3% payrises out to the workers when the CEOs enjoy double digit rises despite poor performance in things like shareprice.

There has always been one rule for the ruling elite and a completely different (and far worse one) for the rank and file.

dtsazza

grizzly1911 wrote: »

at the nation’s biggest and most prestigious law firms, associates—attorneys who do not hold equity in the firms they work for—will be receiving year end checks greater than the full salaries of many of their contemporaries.

I don't inherently have a problem with this - certainly no more than I would have a problem with someone earning more than the salary of their contemporaries in general.

I've always thought of someone's pay as being salary + bonus. And in fact, from that perspective, the bonus is a simply part of the pay that is conditional, and can be withheld (or extended). In fact if it weren't so common, I propose that it might seem crazy to make 100% of someone's pay unconditional, rather than the company reserving the flexibility to vary e.g the top 20% depending on worker and company performance.

So let's say that we have someone on $100k getting a further $100k as a bonus, and as per the quoted sentence we're comparing them to someone on $70k. Rather than saying "their bonus is bigger than the other guy's salary", I think we should frame it as someone who's on $200k being on $200k. Yes, this is about three times the other guy's pay. The fact that half of that pay is conditional isn't really the big deal.

ILW

somethingcorporate wrote: »

I think the point is that regardless of how the firm is performing those sat at the top of the pile will do well regardless.

We see this in the UK too - loads of companies giving 2-3% payrises out to the workers when the CEOs enjoy double digit rises despite poor performance in things like shareprice.

There has always been one rule for the ruling elite and a completely different (and far worse one) for the rank and file.

A company is run for the benefit of it's owners, not it's employees. Which is the way it should be.

Conrad

somethingcorporate wrote: »

There has always been one rule for the ruling elite and a completely different (and far worse one) for the rank and file.

Loads of high profile British left wing comics and musicians take vastly more out of the entertainment pie than struggling little known artistes.
Should they start sharing the love and stop hoarding?

I'm involved in dance music. Top producers and DJ's hog most of the pie. Shall we force consumers to buy the wares of lessor known struggling artists?

somethingcorporate

ILW wrote: »

A company is run for the benefit of it's owners, not it's employees. Which is the way it should be.

I think you will find the shareholders are the owners of a company not the CEOs.

I remember reading a stat last year that the bonus pool for Barclays was in the multiple billions whilst the dividend was about 10% of that. Is that rewarding the owners or the employees?

You are right in the legal world that the partners are the owners but my post deliberately referred to CEOs and I was referring to companies.

somethingcorporate

Conrad wrote: »

Loads of high profile British left wing comics and musicians take vastly more out of the entertainment pie than struggling little known artistes.
Should they start sharing the love and stop hoarding?

I'm involved in dance music. Top producers and DJ's hog most of the pie. Shall we force consumers to buy the wares of lessor known struggling artists?

You are reading something into my post that is not there. I am suggesting the top of the pile profit at the expense of the lesser. I am not saying it is good or bad, merely that is the way it is.

Personally I think it needs to have its limits as evidently you cannot have companies too big to fail which distort reality.

ILW

somethingcorporate wrote: »

I think you will find the shareholders are the owners of a company not the CEOs.

I remember reading a stat last year that the bonus pool for Barclays was in the multiple billions whilst the dividend was about 10% of that. Is that rewarding the owners or the employees?

You are right in the legal world that the partners are the owners but my post deliberately referred to CEOs and I was referring to companies.

And shareholders can (in theory) vote out non performing CEOs.

My point though was that comparing CEOs pay to employees pay within a company is meaningless.

Conrad

somethingcorporate wrote: »

You are reading something into my post that is not there. I am suggesting the top of the pile profit at the expense of the lesser. I am not saying it is good or bad, merely that is the way it is.

Personally I think it needs to have its limits as evidently you cannot have companies too big to fail which distort reality.

Your name and the tone of some posts lead me to believe you were in general a supporter of the workers, and largely at odds with senior managment.
Sort of 'fat cat' stuff Billy Bragg, Ben Elton, Steve Coogan, Tony Robinson and many more blather on about, even though they have hoarded and put out of circulation hundreds of millions of £££'s between just those 4.

I thought you might be one of those people blinded to left wing hippochrasy.

Apologies if I misread you.

somethingcorporate

Conrad wrote: »

Your name and the tone of some posts lead me to believe you were in general a supporter of the workers, and largely at odds with senior managment.
Sort of 'fat cat' stuff Billy Bragg blathers on about, even though he's worth millions of course.

Apologies if I misread you.

You did - my name refers to a band - google it - they are quite good.

I work in a management grade myself and have benefited from the status quo so have no (well only a few) issues with the way things are.