November 13th, 2008
04:54 PM ET

Meaning of Goldman, Morgan Stanley‘s planned bonuses?


Click the play button to see what Jack and our viewers had to say. (PHOTO CREDIT: GETTY IMAGES)

FROM CNN's Jack Cafferty:

The economic picture got even worse today. Weekly jobless claims were the worst we've seen in 7 years. Mass layoffs continue to be announced across a variety of sectors. And the markets remain in a free fall as the Dow's off around 30 percent for the year and the NASDAQ and S&P 500 are both off around 40 percent.

The Senate Banking Committee held a hearing today with representatives from banks getting money from the big $700 billion financial bailout package. Committee members wanted to know where the money is going. Not an unreasonable question.

Bank executives said they are both lending and working with delinquent homeowners and that this money is not going to pad executive paychecks.

Watch: Cafferty: Planned bonuses?

A general counsel at Goldman Sachs told the committee that compensation, "will be down very significantly this year across the firm, particularly at senior levels... We get it."

But what does "down very significantly" mean on Wall Street? According to Bloomberg financial news, Goldman Sachs has set aside $6.8 billion for year-end bonuses, and Morgan Stanley, $6.4 billion.

That figure is down from the record setting $12.1 billion Goldman shelled out last year and the $10 billion Morgan Stanley doled out.

Granted they cut the bonus numbers in half, but that's still a mind-boggling amount. And both firms are taking taxpayers' money from the bailout package. Goldman Sachs and Morgan Stanley each got ten billion dollars.

Here’s my question to you: What does it mean when Goldman Sachs and Morgan Stanley are planning to pay $13.2 billion in year-end bonuses?

Interested to know which ones made it on air?


Filed under: Goldman Sachs • Morgan Stanley • US Economy