> wouldn't you feel shorted if you made the company 10x that in profit on your trades
That guy didn't make the company all that money entirely on his own. Lehman supplied the capital, they get the bulk of the profit. That's how it works.
If he wants the truly big bucks (as if a million isn't), then he should trade his OWN money. But of course he probably didn't have anywhere close to enough to do so.
> That guy didn't make the company all that money entirely on his own. Lehman supplied the capital, they get the bulk of the profit. That's how it works.
Capital doesn't sit there and make money by itself. The allocation between how much of the profit the bank gets versus the trader is itself a market transaction--if the bank low-balls traders consistently, they'll just go to another bank. If the supply of traders who can do that is low relative to the amount of capital available to invest, bonuses will go up and traders will take a larger allocation.
Yes, that's true. In fact, that's true of all employees at all companies (just replace "trader" with "employee" and "bank" with "company").
However, we do not know that this trader was underpaid relative to other traders. All we know is that he was unhappy with his bonus. Once you join the Manhattan rat race, you'll find all sorts of ways to be unhappy with your bonus no matter how big it is and regardless of whether you are paid the same relative to your peers or not. In Manhattan, the sky is the limit as far as apartment prices go, for instance. If you want a place just slightly nicer or in just a slightly more ideal location, after a certain point that might be an extra million right there. There's a culture of making everyone constantly feel poor, especially after a transition in the 1900s where it became hip to live in the city rather than out of the city.
You conveniently ignored "and all your friends at other firms that made 10x got a bigger check than you." People compare themselves to their peers. That's how it works.
I "ignored" that because it's total speculation, invented by the person above. It wasn't included in the source article at all.
And it's also completely irrelevant. Some of his peers on Wall Street got a bonus not of $2 million but of $20 million. If you can't emotionally handle that, then yes, you should definitely get off of Wall Street. You will never be the guy making the most money there.
The only people who are compensated exactly for the value they create are the people who risk their own money.
What likely happened is the guy in question pissed off a Senior VP and he and all his friends made the first ~$10-15 million. His friends get $2 million and he gets half.
I'd be mad, too. Just because it's a lot of money doesn't mean he should be happy with getting a less proportionate amount.
That guy didn't make the company all that money entirely on his own. Lehman supplied the capital, they get the bulk of the profit. That's how it works.
If he wants the truly big bucks (as if a million isn't), then he should trade his OWN money. But of course he probably didn't have anywhere close to enough to do so.