Of course, that public sector yardstick still doesn't shatter the princely expectations of Wall Streeters. Many recall Babe Ruth's comment when he was told his salary dwarfed that of President Herbert Hoover: "I know, but I had a better year than Hoover." The critics forget that the performance based retort doesn't work here. Dick Fuld of
can hardly identify with Babe Ruth's batting average.
Nonetheless, some Wall Steeters also argue that the financial magnet is critical for talent attraction and retention. In this time of distress, where will they go for a better deal? Critics cite the flight of a dozen Merrill Lynch stars for
(DB - Get Report)
this week as proof that top talent will flow to the many higher-paying financial institutions that beckon. Sadly, these Merrill refugees are about to become salaried employees anyway. They must have missed the rest of the Deutsche Bank news this week that the bank just reported $5 billion in losses for the year and no profits in any of its business units.
Furthermore, reports show pressure for pay moderation, curbing excessive compensation at all European banks, including even those few such as
and Deutsche Bank. In fact, investment bankers in Europe have had less than half the commission structure of Wall Street with Asia far lower. It seems that Wall Street wages were already for more mismatched with global competitors than the maligned Detroit autoworkers against their global counterparts.
It is true that financial services is a notoriously fluid labor market but haven't top stars already have been trying to flee sinking ships before salary caps were distressed? In fact, Greg Fleming, the president of Merrill Lynch, just left for a job a Yale University. (Surely this is not because we are not a TARP protected institution!) Perhaps there is more than commercial greed that drives brilliance. Mozart dies in poverty but few would claim that the affluent Madonna was more creative. Van Gogh hardly had the commercial triumphs of the mass production "art" of Thomas Kincaid but their creative genius did not match their bank accounts.