How much pay is too much pay? Most would probably respond, "I'll let you know when we cross that line -- but don't hold your breath."
On Wall Street the question comes up in all sincerity, as if someone was deciding on treatment options for a slow-moving cancer. Bankers who dropped the ball in the credit glut by lending at light speed regardless of the consumer's financial health -- but made money by gambling for and against themselves -- have rung up teeth-shattering bonuses throughout the financial crisis. They will do that again this year, of course, although the bonus checks are expected to have fewer zeros.
To leverage some levity here, what's obscene minus about 22 percent to 28 percent, the amount Options Group said bonuses would decline this year? The answer, appallingly, is now the have-nots have to wrestle with the image of corporate executives car-pooling, which is to say, putting two families in a Lear jet to fly them to a vacation in Aspen.
What happened? The Wall Street Journal explained Tuesday after-tax profits in the third quarter among corporations listed on the New York Stock Exchange, plummeted from $8.7 billion in the third quarter of 2009 to $4.7 billion in the third quarter this year.
This is likely to put a crimp in a few lifestyles -- not many, but for those the Journal describes as believing "flying private is … a basic human need," these are scary times. Some, it turns out, are afraid of flying; others are afraid of flying commercial.
Fewer zeros on a Christmas bonus check, however, does have an immediate trickledown effect at businesses that cater to the section of the theater John Lennon at a Beatles command performance once cajoled, if hand-clapping wasn't an option then, "rattle your jewelry."
For 15 million out of work Americans, a Lamborghini for Christmas would be sold before New Year's Eve or used as shelter. For Jeff Drajin, who actually sells Lamborghinis for a living: "This year is different. It's a little quiet."
Similarly, for Jonathan Beckett, chief executive officer of a firm that rents yachts for as much as $1 million a week, it isn't expected to be a banner year. A few yachts in the Caribbean that would not fit between the thirty yard line and the opposite goal line on a football field are waiting for customers this year, the Journal reported.
What may be good news, philosophically speaking, is that some of the bankers who glide through the day without touching the ground are now scuffing the bottom of their shoes. They are learning how to quibble.
"They used to call up and say: 'I want this boat on this date. Just send me the contract.' Now they're saying, 'Who's giving the best deals?'" Beckett said.
In international markets Tuesday, the Nikkei 225 index added 0.22 percent while the Shanghai composite index rose 0.14 percent. The Hang Sent index in Hong Kong rose 0.49 percent while the Sensex in India gained 0.55 percent.
In Australia, the S&P/ASX 200 rose 0.2 percent.
In midday trading in Europe, the FTSE 100 index in Britain rose 0.16 percent while the DAX 30 in Germany -- essentially flat -- lost 0.05 percent. The CAC 40 in France, also flat, dropped 0.02 percent while the Stoxx Europe 600 fell 0.18 percent.
