Mark wrote:AndesSMF wrote:But why did Citi raise their pay?
Was it because people were leaving for better pastures?
Yes, they were according to CNN.
I'm calling BS on that, the problem is that they refuse to let basic market economics do its work, in essence supply and demand.
There aren't really many jobs in supply for all those bank managers on a middle and top level anymore, on the contrary many of those highly payed jobs have evaporated with the dimise of much of the business in most big banks and other credit lending companies so much so that if they would let the market do its thing many of them would have to look for a job outside the banking industry and into the substantially lower payed other industries.
Even top managers are in abudant supply now and neither their exorbitant salaries can be justified anymore these days in what is essentially a financially very troubled industry.
One of the problems most of the time with large publically held companies is exactly that those that should approve and check upon the wages (and bonusses) of middle and top management, the owners aka shareholders, fail to adequately do this because they don't care enough to follow up on their investments , don't understand enough of the business they invest in and (have to) give too much power to the board of directors to determine their own payouts without presetting clear and ambitious but realistic objectives.
These days it has become possible for people to earn exorbitant amounts of money without running any kind of personal risk just by getting into a board of a big company and benefitting from big payout checks set by other board members that usually get in in the same way.
This is unfair towards new entrepreneurs that take the chance to start up a new company and run the risk of personal financial destruction just to try out new ideas and build new companies with fresh ideas and usually newer and more innovative ways of doing things than some of the old dinosaurs that aren't allowed to fail in this "new economy" mostly supported by afforementioned managers and their befriended politicians.
