Remember Dennis Kozlowski? Bald guy, about yay* high? Actually kind of cherubic-looking, in that you could see him playing Cupid in the school play? Used to run this company called Tyco until he was sentenced to 8 1/3 to 25 years in prison? Anyway, quick story about Big D is that the reasons he’s in jail include but are not limited to: 1) paying himself $105 million in 2000 when maybe he should’ve taken a bit less, 2) outfitting the bathroom in his company-funded apartment with a $6,000 shower curtain that even John Thain said no to when it came to decorating his executive washroom, 3) throwing his wife a birthday party in Sardinia that cost (Tyco) $2 million, on account of the performance by Jimmy Buffett, the togas for the guests, the “ice sculpture of Michelangelo’s David spewing vodka from his penis and a birthday cake in the shape of a woman’s breasts with sparklers mounted on top,” the latter of which do not come cheap, this much we promise you. For all of that and more, D-Koz was found guilty on counts of grand larceny, conspiracy and securities fraud. Anyway, the joint has provided a lot of reflection time for DK, and recently, he sat down to share what’s on his mind. Read more »
Guy Who Used Company Funds To Throw Wife Birthday Party Featuring Vodka-Pissing Ice Sculptures And Fireworks Made Out Of Breasts Morally Offended By Corporate GreedBy Bess Levin
Goldman Sachs International has triggered a clause inserted into the employment contracts of a group of its London-based investment bankers in mid-2009 that will result in them having to take a pay cut, Financial News has learned. A number of staff across the investment bank’s European division, which is based in London, have been told this summer that their base salaries will be cut, a source with knowledge of the situation told Financial News. [FN/WSJ]
In 2010, the year he was appointed Bank of America’s Chief Risk Officer, Bruce Thomson’s compensation topped $11 million, making him the highest paid executive at the firm (CEO Brian Moynihan, by comparison, received $1.94 million and former Countrywide CEO-cum-BAC in-house cocktail waitress took home $17,509 in tips**). Does Thomson’s massive package make him stand out when he and his peers in the field attend two weeks of risk camp every summer? Apparently not, because according to a guy who studies such things, risk officers are gettin’ paid. And not only that? People are starting to show them respect. Like acknowledging their existence in the elevator respect.
Citigroup, AIG and UBS are among other companies raising the profile of risk executives. The derivatives meltdown that sparked the 2008 Lehman Brothers Holdings Inc. collapse and an 18-month recession catapulted the role from obscurity to contention for future chief executive officers. “The person sitting in the risk chair now is reporting to the CEO so the caliber has to be higher,” said Neil Hindle, who runs the CRO search practice at Egon Zehnder International in New York. “There has been a real increase in power over the last two years.” That’s evident in the compensation, which can reach $10 million at large financial institutions now, compared with $500,000 as recently as 2001, Hindle said. Five years ago, a CRO typically reported no higher than the CFO, he said. Citigroup Chief Risk Officer Brian Leach said it’s expected he’ll have a seat at the table when Chief Executive Officer Vikram Pandit makes key decisions. A decade ago, a bank risk executive often wasn’t in the room, he said.
Yes, it’s a whole new world for once invisible employees who previously were accustomed to coming into the office several times a quarter and finding someone else at their desk, because HR “didn’t realize someone sat there.” Unfortunately, the pay and the sense that the people you’ve worked for for 5 years know your name isn’t Steve (≠ Tom) will not last long, because according to HBS professor Jay Lorsch, we’ve got about two or three years before people can go back to not giving a shit about you/the work you do anymore. Read more »
As you may have heard, UBS has been going through a bit of a rough patch. Despite posting an annual profit (of 7.2 billion Swiss francs) for the first time since 2006, things just haven’t been the same since the crisis, and some have suggested it never will be, claiming that the bank “doesn’t have a chance” getting back to pre-crisis levels because “too much damage has been done.” Not helping things is the fact that there’s been very high turnover in the last couple months, which may have something to do with the fact that people would like to get paid. While a handful of marquee names (within the industry) have been lured with big checks, many senior bankers have heard nary a peep re bonuses in several years (and the staff’s pay overall is nothing to write home about, either). As one might imagine, tension is running high and recently within the investment bank, there’s been a decision, among those who’ve yet to quit, to air their grievances. The reaction from management? Put a sock in it. Read more »
As we reported last week, in response to the sense it was getting that people were quitting and/or not accepting offers because they wanted to get paid, UBS raised base salaries for some employees. Not everyone got a bump, however, making the statement by CFO John Cryan that raises were “across the board” chap some serious hide. Read more »
Time was, you worked an ungodly amount of hours, sacrificed your personal life, health and so on and so forth in a banking gig because your employer was going to make it rain ka-ching! on your face at the end of the day. In these harrowing, post-crisis times, though, things have changed. The slave labor is still there but the pay is not. Take 2010- according to a “paymaster” interviewed by the Journal‘s Dennis Berman, median banker pay was at about $1.6 million and with this newly popular deferred bonus business, after taxes one is looking at about $380,000 in cash, which the paymaster notes is “not a lot of money,” and which some think might not be worth your time. Read more »
Exciting news for second year associates up through directors. Read more »