BofA’s Lewis: Pay reform needed for Wall Street

Let’s see if he leads the way but if nothing else, it’s encouraging to hear such words from one of the leading executives in the banking industry. A similar run up in banker pay was seen leading up to the Great Depression but the numbers fell in line with the rest of the corporate world quickly and for decades. The spoiled brats of Wall Street still believe they are superstars despite being spoon fed by the US government.

Sadly, it’s also the US government who condones and participates in the payouts that are still well above other industries. The similarities between Wall Street bankers and the rest isn’t even close. Reuters:

Regulators are examining Merrill’s awarding of $3.6 billion of bonuses to its employees, many in units that caused the company to lose $27.6 billion last year.

Bank of America has said it did nothing improper in the process that led to the awards, and Lewis said banks should take the lead in ensuring that pay is fair.

Many investment banking pay practices “have been unsustainable for a long time and need to be reformed,” Lewis said. He said reform must include “pay for performance that supports long-term growth,” and a “reduction of incentives for inappropriate risk-taking through forfeitures and clawbacks.”

Lewis added it would be “disastrous” if the government legislated compensation practices.

I don’t disagree but there are many ways the government can have an impact. If Wall Street doesn’t want to do the job of reforming, they can deal with the consequences of government restrictions. Take it or leave it.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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