Bonuses are Back

I of course was not surprised this morning to wake up to the news that some of the large financial institutions are preparing to grant large bonuses for 2009. Specifically, “Goldman Sachs is expected to pay its employees an average of about $595,000 apiece for 2009, one of the most profitable years in its 141-year history. Workers in the investment bank of JP Morgan Chase stand to collect about $463,000 on average.” I expect that we will see more bonus announcements in the days to come. It also will be interesting to see if the firms couch these bonuses in “all-stock” deals to try to mitigate public outrage or if they will distribute all-cash or mixed packages (likely the later). I also wonder whether the increasing use of “claw-back” provisions will really change the dynamics of compensation practices or, like Goldman’s use of all-stock bonuses last year, is most likely just packaging to try to appease the public and government officials. In either case, 2010 is certain to be another interesting year on the executive compensation front. (For my recap of the 2009 executive compensation debate, see here.)

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3 Responses

  1. Miriam A. Cherry says:

    Hi, Michelle,

    Good to see you earlier at AALS business association section meeting. Apropos of the meeting, figured I might (shamelessly) plug the article my co-author and presented there on clawbacks:

    Miriam A. Cherry & Jarrod Wong, Clawbacks: Prospective Contract Measures in an Era of Excessive Executive Compensation and Ponzi Schemes, 94 Minn. L. Rev. 368 (2009).

    Best regards, Miriam

  2. Michelle Harner says:


    Thank you for the comment and for the reference to your article in the Minnesota Law Review. After your wonderful presentation of the article at AALS yesterday, I was going to mention it in a follow up post, but you beat me to it.

    All the best, Michelle.

  3. Miriam Cherry says:

    Thanks for your kind words about our presentation. Of course, feel free to mention in another post if it happens to be relevant.
    Speaking of which, I’ve been enjoying reading your posts! Best, Miriam