Coaching Tip: The Leadership Blog

How major banks and securities firms are using your bailout money

Major U.S. banks and securities firms are on pace to pay their people about $145 billion for 2009, a record sum that indicates how compensation is climbing despite fury over Wall Street's pay culture.

An analysis by The Wall Street Journal shows that executives, traders, investment bankers, money managers and others at 38 top financial companies can expect to earn nearly 18% more than they did in 2008—and slightly more than in the record year of 2007. The conclusions are based on an examination of securities filings for the first nine months of 2009 and revenue estimates through year-end.

Despite the past year's financial crisis and the ensuing bailout, banks will be paying out a record $145 billion in bonuses, which tops bonuses from 2007.

The surge in bonuses comes barely a year after the government bailed out the U.S. financial system amid the worst economic crisis in generations. This year major U.S. banks and securities firms are poised to pay their employees a record amount in compensation and benefits—about $145.85 billion, according to the Journal's analysis.

The growth reflects a rebound in the banking industry's revenue to pre-crisis levels. The firms in the analysis are on pace to report $450 billion in revenue, a 25% increase from 2007. Overall, pay is on pace to be equivalent to about 32% of revenue, a decline from 40% in 2008.

 

Does your company have enough future leaders onboard?

Even with a high unemployment rate, more than half of large and midsized companies report not having enough management successors currently onboard, according to a survey by OI Partners, a global career transition and executive coaching firm.

• 54% of companies in the survey said they do not have enough qualified successors now working for them to succeed their executives and managers.

• Only 32% of companies report currently having enough management successors in place.

• 14% of companies are not sure whether they have enough future leaders already in their organizations.

The survey included responses from 212 primarily large and midsized employers throughout North America, and it has an error rate of +/- 6.7%, according to OI Partners.

Source:  Talent Management, January 11, 2009

A Greater Focus on Leadership

Learning how to think critically--how to imaginatively frame questions and consider multiple perspectives--is finding its way into MBA programs.

A number of prominent business schools have re-evaluated and, in some cases, redesigned their MBA programs in the last few years.  And while few talk explicitly about taking a liberal arts approach to business, many of the changes are moving business schools into territory more traditionally associated with the liberal arts: multi-disciplinary approaches, an understanding of global and historical context and perspectives, a greater focus on leadership and social responsibility and learning how to think critically.