Article, CNN.com, November 2004
http://money.cnn.com/2004/11/24/commentary/everyday/sahadi/index.htm Most of you reading this headline are probably already mad. "Certainly my bonus could be a bit bigger," you're probably saying to yourself. Well, before you click away from this webpage in disgust, take a look at the bonuses being made by some people.
In a recent report from Reuters, an investment banker earning $200,000 per year may earn take in a bonus between $700,000 to $750,000. A bond trader earning a similar salary can often take in a bonus almost twice that much.
These figures seem even more absurd when you consider that the investment banker's and bond trader's secretary will make on average $55,000 per year, and receive a bonus between $2,000 to $10,000. These secretaries are even doing well compared to a bank teller, who may earn a bonus of $2,200 over their $30,000 annual salary.
The rationale for these obscene bonuses is simple. Those who bring in more money for the company should earn more money. This rationale seems fine until you think about the differences between bonus percentages.
Why should an investment banker or trader earn a bonus that is 375% of their salary, when their secretary only gets 7%-15%? The writer for this article argues that these ranges should be minimized, and that some bonuses are simply too large. You decide.
