Claw Back My Bonus? What, Me Worry?

For finance professionals, anxiety about the size and security of future paychecks overshadows any concern that fruits of last year's labor might be seized from personal bank accounts through government action.

Many fear losing current jobs or never seeing a substantial bonus again. However, the possibility that elected officials might make good on scattered threats to claw back 2008 bonuses is not on anyone's radar screen.

That's the picture that emerges from comments by Wall Street employees in face-to-face interviews, e-mails and online forums.

Little Fear

eFinancialCareers News attempted through a variety of channels to get bankers and asset management professionals to speak concretely about how their lives would be affected if they had to return the bonus they received for 2008. We couldn't find even one person who would answer that question with any precision - even when offered complete anonymity - and just one who would even admit feeling threatened.

"Since I have recently been laid off I am counting on my bonus to help bridge the gap to my next job," wrote "Ako" on eFinancialCareers' Debate page for this topic. "Bonuses are already lower than last year and I worked my butt off - they would have to pry them from my cold dead hands."

A few said their bonus was too small to matter. "I don't get enough of a bonus that it would make much difference, and my company is intensely conservative and has not suffered as much as many others," wrote an assistant vice president in a support department at a boutique investment banking and financial services firm.

Different Questions

Many of our contacts couldn't seem to get their arms around the question. We're guessing that's because they correctly perceive politicians who talk about large-scale clawbacks of last year's bonus money are simply looking to create favorable buzz for themselves, rather than being serious.

These people tended to answer a different question than the one we posed: How would being forced to repay a bonus affect their personal finances? Typical was "Rachel", who posted in eFC's Debate thread: "I will return my bonus if it is going to help other people. Some people have no place to stay or food to eat."

New York financial planner Michael Goodman, president of Wealthstream Advisors, says clients who work for financial companies "are concerned about a lot of things, but (bonus clawback) is one concern I haven't heard yet." Instead, they worry about job security, the possibility of a reduced standard of living, and postponing retirement because their future compensation may be "a fraction of what it was."

Other sources doubt public officials could reclaim the money even if they tried. "There's no way they could get it back," says an alternative investments professional who eFinancialCareers News encountered at the Wall Street Pink Slip party earlier this month (and who is currently employed).