Former Merrill Lynch CEO John Thain pointed out at the Reuters Global Finance Summit in New York this week that senior staff receiving a large part of their compensation in deferred equity didn't prevent the failure of either Bear Stearns or Lehman Brothers.
Thain said: 'The focus on bonuses as the cause of risk-taking is just wrong. Bonuses did not cause excessive risk-taking, and bonuses did not cause the financial crisis'.
Reuters reports that Citi is raising the base salaries of CFO John Gerspach (from $400,000 to $500,000), and James Forese, co-head of global markets (from $225,000 to $475,000). Both executives have had their compensation capped by US pay czar Ken Feinberg. CEO Vikram Pandit will receive a $1 salary next year, and no stock awards.
The New York Times says that, according to a new report from the Comptroller of New York State, profits at Wall Street firms are on track this year to beat 2006's record. The report also says that job losses on the Street since the start of the financial crisis are likely to come in lower than originally expected. 28,300 jobs, or 15% of the total, have been lost from November 2007 through the end of September 2009.
And Bloomberg reports that US market regulator The Securities and Exchange Commission has confirmed that financial penalties against companies and individuals has more than doubled in the year ended 30th September. The agency issued or obtained $2.09bn in disgorgement, and levied $345m in fines in the period.
The New York Post reports that Goldman CEO Lloyd Blankfein has apologised for his firm's role in the financial crisis. Speaking at a conference hosted by Directorship magazine Tuesday, Blainkfein said: 'We participated in things that were clearly wrong, and have reason to regret. We apologize'.
Finally, Goldman is also said to have notified the Obama administration that it is to team up with Warren Buffett in order to offer support to up to 10,000 small businesses. The initiative is thought like to include providing advice on how to obtain financing.
'John Thain is the voice of reason in the midst of this current highly-politicized, hysterical situation we find ourselves in. The mains reasons for the crisis wasn't bonuses, but lack of respect for governance, control and risk management'.