On Tue, 13 Jul 2010, Jordan Hayes wrote:
>> These are people who make stuff. Finance guys are far more entitled.
>
> Largely because that's the structure of compensation: rain makers get
> paid.
>
> So it's self-reinforcing ...
I think the key might lie in something you once argue to me off-list: that investment banks aren't really public corporations, they are disguised partnerships, with the bankers being mainly paid in stock and mainly keeping it there, and collectively controlling enough of it as a group to control the governance. Outside investors are either sophisticated investors who think the returns are worth or dupes who don't realize the game si rigged. So any attempt to analyze bonuses in terms of a labor market is misconceived. Bonus disputes are better thought of as partnership disputes over dividing profits and rents which, if not settled amicably, will lead some partners to join or start a competing partnership.
Michael