22 September 2008

Competitive Pressure

As a follow-up to my previous post, this Times article about the "fate" of some top managers of the bankrupt Lehman Brothers may be of interest. A few excerpts:

"Barclays has identified eight individuals out of the New York staff of 10,000 who are vital to make the deal succeed and a further 200 who are identified as “key”. It is thought that these eight directors will be locked into two-year contracts worth between $10m and $25m a year. [...] Barclays said there is no obligation to pay it out but analysts say the competitive pressure to keep key staff means he will have to. "

I don't accept this "competitive pressure" argument. CEOs of the biggest Swiss bank UBS also use it all the time, even after these "key" people led the bank into its biggest losses ever. If this "competitive pressure" really forces them to pay insane salaries to few while laying off many, it has to be stopped. See my last post...

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