What’s wrong with wall street bonuses paid in deferred stock with a 2 year look-back. If you lose money the next year then there is an allowance to claim some or all of the prior year’s bonus. That’s it.
If an institution that has received a government loan makes a good hire then he will want a competitive offer. It’s true that right now most places aren’t paying that well but they are paying better than whatever you’ll get after a 90% tax rate. Every bank with a loan will get the worst of the worst so we’ll never get any of the loan back, or at least it will take a lot longer when you have the worst talent in the world.
If the US government owns a majority of the stock then that is a special case (AIG). If we have only made a loan (and taken very little equity) then compensation is set by the board of directors. That’s the law.
Popular outrage is not with the bonuses themselves, it’s with the contradiction between huge losses and big bonuses. It’s with gross mismanagement and a complete failure to regulate.
Stupid populism makes bad policy.