Financial services executives are getting big bonuses despite complaints about excessive compensation. On average, top executives received $3.35 million in bonuses in 2005, up almost 30 percent from 2004, according to Investment News. The trade newspaper based its figures on a review of compensation for some 50 financial services executives.
These executives gave up a modest amount of their base salary - 1.25 percent, to be specific, for an average of $550,405.
"Business is good, and when business is good, people want to get paid," New York-based recruiter Michael Kelly told Investment News. "Trust me, that couldn't be truer on Wall Street."
Bonuses, noted Paul Hodgson, a senior researcher at the Corporate Library, LLC, a corporate-governance research firm in Portland, Maine, "tend to be fairly reflective of actual achievements." However, he said, annual bonuses are now so high "that level of compensation should only be paid out for long-term achievements as opposed to short-term operational achievements."
Recently, a number of investors have called for an end to such large compensation packages, and the Securities and Exchange Commission is considering changing disclosure rules so that perks worth more than $10,000 is required, down from the current level of $50,000.