Wall Street bonuses

[TerraPrime]

I know I don't have a degree in Finance or Business, but it seems to me that the exclusion of people who are unemployed from the calculation of media or average household income seems like a sleight-of-hand. It's tantamount to saying that if we don't count the starving people, then everyone in the U.S. has met the daily nutritional intake requirement. Seems rather silly to me.

Another thing I don't get is how anyone can be serious and say that $500,000 is not a lot of money. I just don't get it.

[WhiteQueen]

[quote name='mormont' post='1673486' date='Feb 4 2009, 09.20']And also meaning, surely, that a lot of people make well below average?

And if it's a mean figure, of course, it's actually possible that the majority do make below that due to a small number of high earners skewing the figures. I agree it's unlikely that the 'vast majority' make below 50K, but equally the claim that New Yorkers making this income are 'non-existent' or even effectively so isn't backed up by these figures either.[/quote]
Just to clarify, it's not New Yorkers who are non-existent, it a [i]vast majority[/i], that does not exist. I am sorry if I was being unclear.

[WhiteQueen]

[quote name='TerraPrime' post='1673593' date='Feb 4 2009, 10.59']I know I don't have a degree in Finance or Business, but it seems to me that the exclusion of people who are unemployed from the calculation of media or average household income seems like a sleight-of-hand. It's tantamount to saying that if we don't count the starving people, then everyone in the U.S. has met the daily nutritional intake requirement. Seems rather silly to me.

Another thing I don't get is how anyone can be serious and say that $500,000 is not a lot of money. I just don't get it.[/quote]
Maybe somewhere in Wisconsin it is a lot, in Manhattan it is not much. I am not talking about luxury, I am talking about a normal family of four, their mortgage payments, school tuition (because you just can't send your kids in a public school in NY - unless you are a bad parent), food, childcare, clothes, insurance (home and car), bills, 529 plan (which melted recently), 401k (which also melted)occasional vacation. Out of curiousity look up a value of a townhouse in NYC, and do the mortgage calc., and then you would see what sort of expenses people are dealing with here. This is not to undermine other areas. But there are different tiers of salaries and expenses. Reminds of me of the Family Guy episode when Peter was declared the richest man on some tropical island because he had $36 and it was the most money the natives have ever seen. They also could not fathom how one could have $36 and say it's nothing.

[Ashaman]

about the same topic[url="http://www.bloomberg.com/apps/news?pid=20601070&sid=a7RNlu85M_m4&refer=home"]Bloomberg[/url]
[quote]Wall Street firms’ pay has traditionally been tied to performance of the companies. As the bonus portion of employees’ pay has grown, many started to expect it regardless of performance. Some employees have been receiving incentives “for basically turning up,” Barclays Plc Chairman Marcus Agius said last week at the World Economic Forum in Davos.[/quote]

[Ashaman]

[quote name='UltimateIceQueen' post='1673608' date='Feb 4 2009, 17.10']Maybe somewhere in Wisconsin it is a lot, in Manhattan it is not much. I am not talking about luxury, I am talking about a normal family of four, their mortgage payments, school tuition (because you just can't send your kids in a public school in NY - unless you are a bad parent), food, childcare, clothes, insurance (home and car), bills, 529 plan (which melted recently), 401k (which also melted)occasional vacation. Out of curiousity look up a value of a townhouse in NYC, and do the mortgage calc., and then you would see what sort of expenses people are dealing with here. This is not to undermine other areas. But there are different tiers of salaries and expenses. Reminds of me of the Family Guy episode when Peter was declared the richest man on some tropical island because he had $36 and it was the most money the natives have ever seen. They also could not fathom how one could have $36 and say it's nothing.[/quote]

seriusly are there no other place one can live, which have a lover cost of living and still be able to commute or something to the same work? i seriusly cant fantom that one cant find something less expencive and still be able to get to work while live in new york, whit $500,000.

Edit:
--> $500,000

[Edda van Heefmstra Ruston]

QC, even by your own stats that $500,000 is still roughly four times the average annual salary in Manhattan. I think that most people would say that's a lot to be getting as an [i]annual bonus[/i], even when cost of living is so high. It's also tending to be the bonuses of executives (right?) who aren't trying to live on $125k in Manhattan to start with.


Again, sorry, I misread. The $500,000 is total compensation, but it's still considered on the low end by that group. This is where others' points about it being a single person's income and easily finding ways (even good/worthwhile ways) to spend it without it being [i]necessary[/i].

[mormont]

[quote name='UltimateIceQueen' post='1673608' date='Feb 4 2009, 16.10']school tuition (because you just can't send your kids in a public school in NY - unless you are a bad parent)[/quote]

QC, you are not doing yourself any favours here. You could say "[u]in my opinion[/u], [u]if you can afford[/u] to send your kids to a private school in New York then you really have to do so," or even "if you can afford to send your kids to private school in NY but refuse to do so you're letting your kids down." But this statement, as read, is suggesting that anybody who is unable to afford school fees is a bad parent. Was that really what you were trying to say? If not, couldn't you be more careful and review what you write to make sure it isn't coming over wrong?

[Guest Raidne]

[quote name='UltimateIceQueen' post='1673608' date='Feb 4 2009, 11.10']Maybe somewhere in Wisconsin it is a lot, in Manhattan it is not much. I am not talking about luxury, I am talking about a normal family of four, their mortgage payments, school tuition (because you just can't send your kids in a public school in NY - unless you are a bad parent), food, childcare, clothes, insurance (home and car), bills, 529 plan (which melted recently), 401k (which also melted)occasional vacation. Out of curiousity look up a value of a townhouse in NYC, and do the mortgage calc., and then you would see what sort of expenses people are dealing with here. This is not to undermine other areas. But there are different tiers of salaries and expenses. Reminds of me of the Family Guy episode when Peter was declared the richest man on some tropical island because he had $36 and it was the most money the natives have ever seen. They also could not fathom how one could have $36 and say it's nothing.[/quote]

Oh, yes it is. Especially for one person's salary. Cost of living isn't [i]that[/i] different in D.C., so I bet I have a pretty good idea of what it takes. You could send your kids to private school and have a mortgage at a household income of $300,000 a year surely. I can't imagine how people in live in NYC on $50,000, but saying $500,000 isn't much is too far the other way. It's at least $200,000 over what would surely be enough to cover upper middle class expenses.

I'm not saying it's not easy to make an extra $200,000 a year evaporate in NYC, or that people making that for their entire household feel fabulously wealthy - I'm quite sure they don't - but it is still a lot of money.

And here, $500,000 is [i]one[/i] person's income.

[WhiteQueen]

[quote name='Marie-Angélieef' post='1673497' date='Feb 4 2009, 09.30']I'm also guessing there's a difference in definition. QC seems to be limiting "New York" to Manhattan, while Lev seems to be going for a broader "metropolitan area".

With his description, he's not entirely wrong either. [url="http://www.bls.gov/oes/2007/may/oes_35620.htm"]http://www.bls.gov/oes/2007/may/oes_35620.htm[/url] Median hourly is $18.81, mean hourly is $24.43, and mean annual is $50,820. The "vast majority below" that is probably an exaggeration, but the very high salaries of tops execs will be distorting the mean, no doubt.

I can't actually find BLS stats for the county level, but I have no reason to distrust QC's claim outright. [url="http://www.fedstats.gov/qf/states/36/36061.html"]http://www.fedstats.gov/qf/states/36/36061.html[/url] gives a much lower median salary, $45,290, but it's also data from 2004, not 2007. (It's harder to compare mean to median than just straight across anyway.)[/quote]
His original post referred to another poster's example of a friend who lives in NYC on under $30,000 and saves! On which I commented that it's impossible, unless she is (as you correctly pointed out) living in one of the boroughs. He kept arguing. In Manhattan, income per capita, is about $98,000. That includes children (who do not produce income), and the poorest people who live in government sponsored projects. And again, I was referring to VAST MAJORITY, as non-existent, not to the low salaries. My little brother lived with my parents in their lovely Manhattan apartment until he was 29, had zero expenses, made like $30,000 and lived very well, travelling to Thailand, Brazil, Argentina, Chile, Mexico, Israel, Egypt and other coutries I don't recall. Surely he scewed the data, too, having an Upper West Side address and $30,000 salary. :dunno:

[Guest Raidne]

So, are people in support of this $500,000 executive pay cap, or what?

[WhiteQueen]

[quote name='mormont' post='1673623' date='Feb 4 2009, 11.17']QC, you are not doing yourself any favours here. You could say "[u]in my opinion[/u], [u]if you can afford[/u] to send your kids to a private school in New York then you really have to do so," or even "if you can afford to send your kids to private school in NY but refuse to do so you're letting your kids down." But this statement, as read, is suggesting that anybody who is unable to afford school fees is a bad parent. Was that really what you were trying to say? If not, couldn't you be more careful and review what you write to make sure it isn't coming over wrong?[/quote]
Are you aware of statistics on NYC public schools? It is not a topic of this thread, and I would not post it here, but the stats are horrifying. I would love to send the children to public schools, after all I pay taxes, part of which goes to public education. But the schools are just horrid, and I simply cannot. As for affording, I know plenty of people whose children were accepted to private schools with scholarships covering the tuitions. There are ways - corporate sponshorship, special grants, whatnot.

[WhiteQueen]

By the way, everyone is aware that bonuses are taxable at almost 50% rate, right? So a $100,000 bonus, is really only a $50,000 bonus after taxes, and the government takes another half right back. So, if $20 bln of taxpayers money went to bonuses, the taxpayers immediately contributed $10 bln back to the government.

[mormont]

[quote name='UltimateIceQueen' post='1673641' date='Feb 4 2009, 16.28']Are you aware of statistics on NYC public schools? It is not a topic of this thread, and I would not post it here, but the stats are horrifying.[/quote]

None of this has anything to do with my point.

[quote]As for affording, I know plenty of people whose children were accepted to private schools with scholarships covering the tuitions. There are ways - corporate sponshorship, special grants, whatnot.[/quote]

There might well be. But unless there are a [u]lot[/u] more than I think - enough for every single child that wants one, basically - this is not answering my point either.

[u]Are[/u] you saying that anybody who can't afford to send their kids private, or has been unable to get a scholarship etc., is a bad parent? I initially thought you had just expressed yourself badly, but is this actually what you meant to say?

[Lyanna Stark]

[quote name='UltimateIceQueen' post='1673643' date='Feb 4 2009, 18.31']By the way, everyone is aware that bonuses are taxable at almost 50% rate, right? So a $100,000 bonus, is really only a $50,000 bonus after taxes, and the government takes another half right back. So, if $20 bln of taxpayers money went to bonuses, the taxpayers immediately contributed $10 bln back to the government.[/quote]


Uh, is that supposed to make it better? That tax payers got at least half of it back? :stunned:


[quote]This is not to undermine other areas. But there are different tiers of salaries and expenses.[/quote]


I think your standard of living is not really average, nor representative for a majority of people. :)

[Guest Raidne]

[quote name='UltimateIceQueen' post='1673643' date='Feb 4 2009, 11.31']By the way, everyone is aware that bonuses are taxable at almost 50% rate, right? So a $100,000 bonus, is really only a $50,000 bonus after taxes, and the government takes another half right back. So, if $20 bln of taxpayers money went to bonuses, the taxpayers immediately contributed $10 bln back to the government.[/quote]

That's just false. Withholding may look higher because of payroll programs, but it's taxed the same as your other income.

ETA: But bonuses are taxed at your marginal rate, since they're clearly not going to be income that's falling into the lower tax brackets. So I can see how it might [i]look[/i] that way.

It's covered [url="http://www.irs.gov/pub/irs-pdf/p15.pdf"]here[/url] under section 7, supplemental wages. I see that supplemental wages of $1 million are taxed at 34%, or whatever the highest rate is, which could look like 50% when you take medicare and social security, but that's what your marginal tax rate looks like at that income anyway.

[naz]

QC,
I've tried to defend some of your points up until now, but to say that anyone who sends their kids to public schools in NYC is a bad parent (if that's really what you're saying) is seriously unwarranted. I shouldn't even have to explain why it's an over-the-top statement, so I won't.

Honestly, it doesn't help some of your more valid arguments to make crass generalizations like that. It's no surprise, then, when other people tend to dismiss your comments wholesale as largely out of touch.

[Iskaral Pust]

Some of this debate harks back to the thread on whether $250,000 income makes you wealthy (stimulated by Obama's tax plan). The same caveats apply that $250k in NY is nothing like $250k in Podunk, Flyover State. There are some hasty criticisms here from people relying only on their personal experience. However, doubling the threshold to $500k and some Marie-Antoinette comments from QC are not helping her case here.

[WhiteQueen]

[quote name='Raidne' post='1673663' date='Feb 4 2009, 11.42']That's just false. Withholding may look higher because of payroll programs, but it's taxed the same as your other income.

ETA: But bonuses are taxed at your marginal rate, since they're clearly not going to be income that's falling into the lower tax brackets. So I can see how it might [i]look[/i] that way.

It's covered [url="http://www.irs.gov/pub/irs-pdf/p15.pdf"]here[/url] under section 7, supplemental wages. I see that supplemental wages of $1 million are taxed at 34%, or whatever the highest rate is, which could look like 50% when you take medicare and social security, but that's what your marginal tax rate looks like at that income anyway.[/quote]
Absolutely not. It is taxed at a gift rate.

[Guest Raidne]

[quote name='UltimateIceQueen' post='1673752' date='Feb 4 2009, 12.42']Absolutely not. It is taxed at a gift rate.[/quote]

No, it's not.

[HammerOfGod]

[quote name='nazfyratu' post='1672601' date='Feb 3 2009, 15.57']This thread has more than its rightful share of generalizations, anecdotes, and mischaracterizations of entire industries that most of us know little about. While I'm no fan of the rich getting richer, I think a lot of people here are talking about income structures that they really know nothing about.

Just because Obama said that wealthy executives getting bonuses is "shameful" doesn't mean that we have to jump on every Tom, Dick, and Harry financial sector employee whose bonuses are nothing at all like the ones Obama is talking about.[/quote]

At least we know how much the people at the top can make...Obama set it at $500,000 today...also they cannot sell their stock in the company until it turns a profit and the tax payer is paid back...