Last year, two former interns at magazines owned by Condé Nast filed a class-action lawsuit against the company for underpaying them and thousands of other interns, in violation of labor law. According to recent court filings reported by Reuters, Condé intends to retroactively compensate the pair and over 7,000 other former interns in order to settle the legal dispute. The price tag: $5.8 million.
It's a good thing Citigroup repaid that $20 billion it owed the U.S. government on December 14. If it hadn't, some people might be a tad ticked off to hear that on December 30, the bank paid John Havens, Citi's investment banking chief, $9 million for his stellar work in 2008, making him the broken bank's highest-paid employee for the year. [WSJ]
Goldman Sachs is giving in, believe it or not. The bank announced this morning that it plans to change up the way it compensates its top 30 execs this year, as the fury over outsized pay packages continues to grow. Goldman says it will now pay out the bonuses in the form of restricted stock, a move that will likely gratify Goldman's critics and also terrify high-end real estate brokers and Porsche salesmen in the Hamptons. [NYT]
JPMorgan CEO Jamie Dimon shared some delightful news this morning. As expected, the bank posted super-solid earnings for the third quarter, generating $3.6 billion in profit based on $26.6 billion in revenue, results that were considerably higher than what Wall Street analysts were expecting. The House of Dimon also revealed that it's set aside $8.79 billion for compensation and benefits for the first nine months of 2009, just about enough to pay out $353,834 to each JPMorgan Chase employee. But don't think that's a good thing. It isn't! Because Goldman Sachs set aside $386,429 per employee for the first half of the year, and will likely put JPMorgan to shame when it reports earnings tomorrow. If you were thinking this world was unjust because millions of Americans don't have decent health insurance and a billion children around the world live below the poverty line, do yourself a favor and head over to JPMorgan HQ on Park Avenue later this afternoon and observe the people streaming out of the building. That, friends, is the true face of misery. [WSJ, Bloomberg]
New York's bad-ass attorney general, Andrew Cuomo, has been looking into compensation on Wall Street for, like, nine months now. And now the fruits of his labor have been unveiled for all to see! Cuomo released a report today called "No Rhyme or Reason: The 'Heads I Win, Tails You Lose' Bank Bonus Culture," in which he says—surprise!—big banks don't usually tie annual compensation to performance, and still pay out massive bonuses even in years when they don't record a profit. How surprising! (It's a good thing we don't tie the state tax rate to the performance of elected officials, too.) Unfortunately, Cuomo's 22-page report doesn't include the names of these Wall Streeters who are raking it in, but he does share a few facts you may find interesting.
Things may be all hunky-dory at Goldman Sachs and JPMorgan Chase now that both firms announced hugely profitable second quarter profits. The same can't be said for Morgan Stanley, though. The bank posted a $1.26 billion loss for the second quarter today, but as is the case with so many things on Wall Street, you should not expect any of the execs at Morgan Stanley to feel the sting: The firm set aside 72 percent of the $5.9 billion it collected in during the second quarter for compensation and benefits. "It was a very good quarter to be a Morgan Stanley employee," said one analyst. "I'm not so sure it was so good to be a Morgan Stanley shareholder." [Bloomberg]
According to Crain's, New York's 100 top-paid executives took home $1.2 billion in compensation last year. And a handful of them, it turns out, are execs who happen to work at banks that received bailouts from Washington: "Number four on the list is Goldman's CEO Lloyd Blankfein, with $42.9 million. Following him is Citigroup's CEO Vikram Pandit, raking in $38.2 million. Jamie Dimon, head of JPMorgan Chase, comes next in line with $35.7 million. Goldman and JPMorgan, which received $10 billion and $25 billion, respectively, in government aid, have recently moved to repay the funds. Citigroup is still saddled with the $45 billion in aid it's accepted." Topping the list, in case you're wondering, is Peter Kraus of Alliance Bernstein, who was paid $52 million just to take the job. But American taxpayers also had a hand in making 2008 a very good year for Kraus: In addition to his take from Alliance, he earned $25 million for the three months he put in at Merrill Lynch in late 2008. [NYP]
Dear Journalists: Lucas Grindley, Operations Manager of HeraldTribune.com ("southwest Florida's information leader"), would like you to get paid like bloggers. Specifically, like us! Summing up a largely boring, wonky, Poyntery debate about the value of reporters and information and CPM, Grindley decries Nick Denton's pay model, as described by noted internet expert David Brooks, as a dangerous idea that "may favor sensationalism" (quelle horreur!). Then he decides the most fair model for our brave new media landscape is to give your content providers a set salary with page view bonus structure built in. Which sounds familiar! As Grindley says: "The point is a bonus system doesn't hurt anyone. But it might help retain top talent while also increasing page views and audience." Also possible: existential crises and mass resignations. Talent are a sensitive bunch.