Exorbitant bonuses handed out to big bank executives has seeded the ire of popular perception, which was sparked during the Great Recession. One Minute MBA walks us through the logic behind big Wall Street bonuses and how the practice may not be as sinister as many think.
Industry competition and market norms have dictated a system whereby end of the year bonuses are a critical part of the financial ecosystem. Whether or not the practice appears justified there is an internal logic to big bonuses.
Source: Online MBA
From Online MBA:
It’s 2013, the economy has been struggling for the better part of a decade and most Americans are fed up with hearing about Wall Street fat cats and their extravagant annual bonuses. Everyone is entitled to his or her opinion when it comes to the ‘1 percent’, but these bonuses aren’t as harmful to the American economy as one might think. In many ways, they’re actually a good thing. Seriously.