Reply #2: Ever see the movie, Wall Street -- the scene where Bud says "I'm tapped out"?

[HamdenRice]

In that movie, early on, Bud hasn't made any sales, so he is literally broke and down to his last $20 and has to borrow from an office mate. Well, that's how the Wall Street pay structure works. They make relatively little in salary (emphasis: "relative," compared to obscene total comp), and the overwhelming amount of their compensation is in "bonuses."

Most Wall Streeters have already spent their bonuses long before they receive them. Some even have taken "draws" or advances and loans on their bonuses, so if the bonuses aren't paid, the employees are in debt to the bank.

Also, each department calculates bonuses based on the performance in that department. So the fact that the bank is failing overall because of the mortgage security division, can't necessarily prevent the bank from having to pay bonuses to, say, a trader at an equities trading desk, who met and exceeded his performance goals.

Crazy system, and the salary + bonuses are way excessive anyway, but it doesn't surprise me that the banks won't avoid paying bonuses.