Despite all the negative press and sternly worded (though anemically delivered) admonitions generated by the West Wing, the Barons of Excess are still flipping the bird at the American people and plundering the company coffers. This time, the culprit is Lazard Ltd. (formerly Lazard Frères), the investment house that’s been around even longer than the Giant Vampire Squid Goldman Sachs. Lazard, to its credit, had refused to be bailed out by the American taxpayers and managed to avoid being consumed by J.P. Morgan or BoA during their feeding frenzy in 2008, but such fiscal discipline hasn’t carried over into 2010:
What should have been a profitable quarter a Lazard Ltd. turned into a surprising loss due to the investment bank paying its people big bonuses.
The firm doled out $616 million in compensation and benefits to about 2,300 employees last quarter, or more than triple the amount handed out in the same period in 2008. It was a consequence, Lazard said, of a decision to pay more bonuses in cash and accelerate some deferred cash awards from a prior year. But so great was the firm’s generosity that compensation costs overwhelmed quarterly revenues and resulted in a net loss of about $55 million for the fourth quarter. The charges also almost wiped out full-year profits.
Trés impressive, no? Seems the average bonus at Lazard was a measly $565,000. Pshaw, that’s chicken scratch! You have to hand it to this country – where else is “talent” defined as rapaciousness and greed?
Someone needs to remind Lazard’s board of directors that the company was taken public in 2005, and that they have a whole host of presumably angry shareholders to explain this grotesque loss to. And gentlemen, this hardly qualifies as an “explanation”:
“[Our compensation policies] should enhance our competitiveness and drive shareholder value,” Mr. Jacobs said, in a prepared statement. “Our goal is to grow annual compensation expense at a slower rate than revenues.”
Get the fuck outta here! It’s the company’s goal to ensure that it takes in more than it pays out? What kind of crazy accounting practice is that?
Does anyone else get the feeling that this country is quickly approaching a tipping point? This is no longer a matter of retaining the best talent, a canard so overused that it needs a hip replacement. It is simply unfettered gluttony, and the main players are starting to cannibalize each other.
And someone needs to point out to the sanctimonious D.C. remoras like John Boehner, once he’s done fellating the Wall Street fat cat donors for campaign cash, that gluttony is a sin.