People who are not on Wall Street have a misunderstanding about the concept of “bonuses,” Tiger Management’s chairman Julian Robertson told CNBC.
“I think [Wall Street bonuses are] defensible,” said the hedge fund legend. “The war about people’s salaries have gone on for years…But it isn’t just on Wall Street. There are singers, actors, sports figures [who are] all making huge amounts of money. You can’t just take one group and pick them out.”
(Watch the accompanying video for the full interview...)
Taxpayers and even President Barack Obama have recently expressed their outrage at Wall Street firms who passed out a collected estimate of $18.4 billion in bonuses for the year, despite receiving multibillion-dollar government bailouts.
Robertson explained that some companies have a maximum amount they can give to employees as salary, but workers are able to earn more through bonuses.
“For instance, at my old firm, the maximum was $70,000,” he said. “That was the maximum you could make. There were a lot of people there that were paid a lot more than that—it all came in the form of a bonus. At the end of the year, those people with a great deal, would have been very annoyed had they not gotten a bonus.”
Robertson continues to be bearish about the economy and said it could continue for a while. While he is currently uninterested in investing in the financial stocks, Robertson suggested a few credit card companies for investors.
“I think that some credit card companies that have no credit exposure like Visa and MasterCard are reasonably valued now,” he said.