For a guy who has been so outspoken about the unfairly positive treatment the banks are receiving over the past year, I am really torn about this whole bonus thing. For those of you who don't know, millions of Americans, including prominently newly sworn-in president Barack Obama, were disgusted and outraged to learn on Thursday that Wall Street paid out $18.4 billion in cash bonuses to its New York City-based employees at the end of 2008 / beginning in 2009 for fiscal year 2008. Many of these banks are the very institutions that received between $10 and $50 billion of taxpayer funds from the TARP program to help stabilize their capital bases and keep them in business as we suffer through the most trying financial crisis since the Great Depression. News that these firms that needed billions and billions of dollars of our money to survive the over-risky positions they got themselves into are now paying out billions and billions of dollars in bonuses to their employees cannot be expected to be taken well.

That said, this isn't nearly as cut and dried as many, including the new president, seem to think it is. In the banks' defense, what they call "bonuses" are not really bonuses in the sense that most non-bank employees think of that word. Having come from that industry myself, I can say with total positivity that this isn't like some other jobs I have had, where you get paid whatever your salary is, and then in a good year maybe they kick you 5 or 10% on top as a year-end bonus. Maybe you get it, maybe you don't, but either way you make your salary and that's what your real pay is. At the banks, the compensation model is completely different. The base salaries at many of the banks, even for those investment bankers making $5 and $10 million a year, generally top out well under a million dollars. It is not uncommon for even the highest-paid bankers in the industry to receive a salary close to $250,000, and then receive their millions all in a bonus at the end of the year, making upwards of 80% or more of their total annual compensation in that year-end bonus.

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