A Call from Labor: Ban Big Bank Stock Options

from Too Much: A Commentary on Excess and Inequality:




A Call from Labor: Ban Big Bank Stock Options
June 3, 2011

Federal agencies are now preparing new regulations for enforcing the banker pay reforms enacted last summer. These new regs, says the AFL-CIO, need to prohibit the ‘incentive’ that’s still stuffing bankers with billions.

By Sam Pizzigati


If you wear a power suit to work every day, you probably don’t care all that much about your salary — because most of your income doesn’t come from salary. Most comes from something called “incentive-based compensation.”

This “incentive-based” pay can come in many forms. You can get cash as an incentive if you meet certain “performance” goals. You can get actual shares of stock as a incentive. Or, maybe best of all, you can get stock options.

Stock options, in today’s corporate and banking world, essentially serve as lottery tickets for big-time executives. Lottery tickets with a difference. The first difference: These executive lottery tickets come free. Executives pay nothing to get them. The second: This executive lottery pays off big — and often.

Regular folks who play the lottery can, of course, certainly hit the jackpot. But the odds against scoring a major windfall can routinely run up to 76 million-to-one, the equivalent of throwing heads on 26 consecutive coin tosses. ...........(more)

The complete piece is at: http://toomuchonline.org/call-from-labor-ban-bank-stock-options/