Excessive Wall Street bonuses hurt shareholders, Brandon Rees, an executive compensation consultant for the AFL-CIO, told CNBC Wednesday.
“Between 2000 and 2008, the top five executives at Lehman Brothers received over $1 billion in compensation,” said Rees. "At Bear Stearns the top five executives received over $1.4 billion in total compensation.
"Meanwhile, shareholders of those institutions were completely wiped out because of the excessive risk-taking and the bonuses they gave those executives.”
Rees said that Wall Street paid out some $20 billion in bonuses last year. Rees also maintains that high bonuses damage both taxpayers, who bailed out Wall Street banks following the financial crisis, and the country.
Employment attorney John Singer, a partner with Singer Deutsch LLP, countered that a company's board approves bonuses, a Wall Street convention based on performance. He added that many arbitration panels side with the productivity argument, should a bonus be disputed legally.
Singer also said that the banks propped up by the federal government with TARP money have paid back all the loans and, as a result, aren't beholden to the American taxpayer or to popular opinion.
He disagreed with criticism that banks and Wall Street were largely responsible for the financial meltdown and the housing marketdebacle. He said that while Wall Street contributed to the problems, so did mortgage lenders, homebuyers and ratings agencies.
“Is it incumbent upon Wall Street,” he added, “to restore the housing market and to restore jobs?”