Brace for Salary Slump
A dozen Lehman Brothers executives, including CEO Dick Fuld, have been subpoenaed in connection to three grand jury investigations about the investment bank's fall. Prosecutors are looking into whether executives made false comments about the firm's health before its bankruptcy.
Also, more bank executives are weighing the prospect of foregoing their bonuses this year. The board at Deutsche Bank said yesterday it would give up bonuses for 2008 to help prop up the wages of other employees whose salaries are taking a harder hit these days.
Some other bank executives have declined bonuses, including Morgan Stanley CEO John Mack, who passed up his 2007 bonus. And JPMorgan is reducing the size of employee bonuses this year, according to CNBC.
So what about the rest of us?
Experts say we're about to experience the worst slump in salary growth since the Great Depression. Most workers will likely notice the dent in their salaries in 2009, when raises are tiny, if not non-existent, and the slump will probably last through 2011. In fact, most households typically see a 3- to 7-percent reduction in salaries during a recession.
Did you know: The median household made $50,200 last year--a bit less than the $50,600 that the equivalent household earned in 2000--according to the Census Bureau. That’s the first time on record that income failed to set a new record during a period of economic expansion.
Other breaking news so far today:
--Exclusive: The Treasury's rescue plan for the financial system has hit a snag.
--The markets, which have swung in either direction today, are headed for a positive close.
Posted by: keenobserver | October 17, 2008 4:51 PM | Report abuse
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