I just stumbled across an old post of mine, and couldn’t help reposting some of it in the light of recent events.
All those financial wizards were making a fortune based on the money they were “creating” — money that has since turned out to be largely fictitious. Top hedge fund managers were earning more in the time it took for an average New York City cab ride (8 minutes) than the average American made in a year.
As I said with a cartoon at the time: “who’s being taken for a ride?!”
Top hedge fund managers made over $657M in 2006. You can use this handy calculator to work out how long it took them to make more than you did all year — the time to brush their teeth? Take a shower? Commute?
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(model below — you will probably have to connect directly to the site to see it)
Unbelievably, the financial industry apparently STILL thinks that million-dollar bonuses are perfectly reasonable for work they do (for example, it’s argued that it’s needed to retain the “best and brightest” at AIG).
Benchmarking is a great practice — but you have to know when to update your benchmarks!
Sources: Pay statistics, time usage stats, NY cab ride, commute, TV watching. Model built using Crystal Xcelsius.
