The End of the Bonus Culture Is Coming to Wall Street?

https://www.bloomberg.com/news/articles/2020-01-13/traders-unlearn-bonus-culture-as-machines-invade-wall-street

by pseudolus • 7 years ago

218 220 7 years ago

anonu3• 7 years ago

I think the headline is a bit sensationalist. But it's mostly true. The GFC was the catalyst. The resulting regulation handcuffed most trading desks (like the failed and nonsensical volcker rule).

But the bonus culture is still alive and well at the small shops, especially the quant shops that embrace automation and scale.

pnako5• 7 years ago

Really? It doesn't make much sense to have bonuses for automation since it's largely a group effort. And that's probably the main reason why those performance bonuses are disappearing.

scawf• 7 years ago

Automation = following model

Whoever build a good model get a good bonus ?

anonu3• 7 years ago

Soccer is a group effort, but you still have star players that get paid outsized compensation.

Trading is very much about managing and taking on risk. Even if there are computers managing trading - managing risk is still human driven.

riffraff• 7 years ago

why do you consider the volcker rule failed and nonsensical?

tomatocracy3• 7 years ago

One argument for why it might not make sense is that banks were actually hurt by traditional banking problems (extending credit to poor risks and run on the bank type issues), not traditional investment banking/brokerage/trading firm problems (large market trading losses, getting stuck with large unsold underwriting positions, being sued by investors they missold to).

smabie2• 7 years ago

The sell-side has become pretty boring and just like other industries. Everything interested has moved to the buy-side, in which bonuses as primary compensation is still alive and well.

Gatsky• 7 years ago

Can you explain what you mean by sell and buy-side?

tomp• 7 years ago

Sell-side == banks, selling financial instruments / market access to investors.

Buy-side == hedge funds, proprietary trading companies, high-frequency market makers, maybe also VCs, PEs, investing (their own or other people's) money, buying financing / market access / financial instruments from the sell-side.

moomin2• 7 years ago

Sell: brokerages. Buy: hedge funds.

Basically the buy side try to be smarter/better/faster/stronger than everyone else, the sell side try to provide an essential service to the buy side, whether that’s a good platform or liquidity or whatever.

Tycho• 7 years ago

The sell side provides liquidity to the market, by engaging in market making and other activities, while the buy side consumes market liquidity (transacting so they can construct/manage a portfolio).

So as others have said, sell side typically is the investment banks and brokerage houses, while buy side is your asset managers.

moomin2• 7 years ago

Believe me, they’re coming for that too. Pretty much every hedge fund manager these days seems to reckon that “alpha” is automatable.

jamisteven• 7 years ago

It is but we are still in infant stages in automation as it pertains to electronic trading. Its a bit of an arms race, I anticipate it is going full circle in that after the point where we have more technologists than traders hits, we will realize all our tech is as strong as the next guys and will need to re-enlist more traders to help with new strategy to differentiate said algo's from the competitions.

yomly3• 7 years ago

Yes, quite. I have a friend who was only 26/27 and took home 325,000 USD as his bonus.

Another is cagey about what he earns but it's stipulated he earns more than the number above.

Meanwhile another friend at a different hedge-fund had a budget over ~20k USD to decorate his personal office at work.

The excesses of finance are absolutely still alive and well but somehow the buy-side has managed to escape the public eye (presumably because they're mostly private)

corporate_shi11• 7 years ago

Why do you call these "excesses"? What would not be excess?

throwaway-fjobs• 7 years ago

Just out of interest, knowing these people personally: what are the kinds of tradeoffs involved in these jobs that pay so extraordinarily well so early in one's career?

Is it a case of spending your 20s 8am-10pm in the office, no weekends, no vacation, etc?

Or, if not, then what's the path into a job like this? Are they simply 0.00001% level brilliant people, lucky, well connected?

kamaal3• 7 years ago

>had a budget over ~20k USD to decorate his personal office at work.

These sort of perks are common in senior management in several software companies as well. Especially if your job involves some sort of client/customer facing responsibilities.

Indian IT outsourcing firms give their top management a very lavish budget to spend. Typically 5 - 7 star hotel stay, business class travel, thick daily per diem to spend and the best meals money can buy. Plus they also get paid to spend what it takes to impress clients to win contracts. Office furnishing budget etc. I even know one person who bought a fairly expensive bose sound system, and even took it to his home over time. No one really audits these things, and money once given is large aggregated in a group by statement in a report somewhere, and since its already sanctioned, no one cares how its spent either.

This is one of the biggest motivations for me to move into management as a career upgrade.

rb808• 7 years ago

I don't really understand how Buy Side can be all that good still. AQR is in trouble, Bridgewater had their first loss in decades, Millennium was good, 2 Sigma is OK if unspectacular, Citadel is good, Point72 is still struggling, Rentec is presumably still great but no one ever knows. The HFT funds like Tower/Virtu are all finding their well dry, over all more hedge funds shut down than started. Which hedge funds are actually doing well in this environment? (OK I listed 3) but I don't see the future as very promising.

throwawaymath7• 7 years ago

Some funds share bonuses across the entire firm, while others operate as internally competing pods/teams. I know people at Jump Trading doing spectacularly well because they're on a high performing team. Not everyone does as well. Millennium and Citadel have a similar model.

RenTech and TGS had a spectacular year as always. But even if you don't work at a firm like that, being on the right team at a strong second tier firm can be extremely lucrative.

Galanwe2• 7 years ago

You cannot mix companies like that. Each of the companies you listed have a lot of funds with very different strategies and PnL.

Long short are having a hard time since 2018 for instance, doesn’t mean directional funds have too.

Also, we are in a high deleveraging in L/S environment, so the last 2 years should not be taken as benchmark IMHO.

RookyNumbas• 7 years ago

You've listed a handful of funds that have good PR, which are the only ones software guys have heard of. They are a fraction of the total buy side. This would be like saying Yahoo, Uber, Google and Cisco represent the entire tech industry.

When the S&P500 is up 25+%, there is a staggeringly large amount of money paid out in bonuses.

JMTQp8lwXL2• 7 years ago

The ironic thing is, anybody who bought and hold diversified index funds since 2018, has done excellently. And it required 0 human intervention of any kind of get that return.

Nicholas_C2• 7 years ago

In what way? I work in sell side M&A and it’s pretty interesting.

TrackerFF3• 7 years ago

I'm just sitting here and wondering what the landscape will look like after the next financial crisis.

papito• 7 years ago

Bailout by taxpayers - then back to our originally-scheduled programming, injected with warnings about the threat of looming Socialism, without a hint of irony.

garminexpress8• 7 years ago

nice post

smacktoward• 7 years ago

If the blowback from the 2008 financial crisis wasn’t enough to kill it, I am skeptical that anything can.

sosilkj• 7 years ago

Sounds like right now banks want people who can code but also have "quant skills". What's the best way to go about learning/acquiring quant skills?

z3ncyberpunk• 7 years ago

By not working for banks

flixic• 7 years ago

I am not working for a bank, and this lack of work so far did not contribute to me gaining quant knowledge. I don't think your advice is very useful.

bradleyjg• 7 years ago

A friend of mine started in the industry right of school with a CS degree but then got a masters in financial engineering at night a few years in.

sjg007• 7 years ago

Learn math, stats, probability.

TrackerFF3• 7 years ago

(Given that you've taken the calc 1-3 + probability and stats 101)

- Linear Algebra

- Numerical Methods

- Stochastic processes

- Time series analysis

- Mathematical Optimization

- Multivariate statistics

- Statistical inference

- Computation intensive statistics

- (Machine Learning)

- (Differential Equations)

- (Mathematical Methods and modelling)

On top of that, some decent knowledge in scripting and programming.

Pretty much any decent Statistics or Applied Math program will provide you with a good foundation of quant jobs.

wayoutthere2• 7 years ago

CS or math masters followed by a masters in computational finance. Most quants are hired right out of these computational finance programs -- which, unsurprisingly, are some of the most difficult programs in the world to be accepted into as you're competing against people from across the world with masters or PhDs in mathematics. Salary ranges are ridiculous; at the school I went to for an MBA it was not unheard of for signing bonuses in quant finance to top $500k (and that was a decade ago).

endothrowho333• 7 years ago

You're better off getting the up-to-date scoop from people that are active in the industry:

https://wallstreetoasis.com/

https://forum.wilmott.com/

auntienomen• 7 years ago

Those are principally forums for people who would like to work in the industry. Take with a grain of salt.

classified• 7 years ago

Ha! Picture me rolling on the floor with laughter, barely able to type this comment. The article's idea is somewhere between a fairy tale and an urban legend.

C1sc0cat• 7 years ago

I am sure that wall street /city employers will support a move to more fixed pay NOT

I am sure employees would enjoy having a more fixed Quata and not have to worry about what they get come bonus time

airstrike6• 7 years ago

This is the opinion of one guy from UBS. Pretty much summarized in two words: irrelevant sensationalism. My bonus isn't going anywhere but up in the next 25 years.

Also this is only talking about trading at bulge bracket banks like UBS but "Wall Street" is much larger and more complex than that.

ackbar03• 7 years ago

Yes and that seems to be their intended scope. In what corner of the street do you dwell?

drharby• 7 years ago

Probably buy side

airstrike6• 7 years ago

Sell-side. M&A advisory

busterarm5• 7 years ago

That's cool. I came from the hedge fund side and left 12 years ago, but many of my peers stayed on. In the last 4 years virtually 100% of them have left due to meager bonuses (we're talking about the systems/infrastructure side of the business, including in HFT) and have all gone on to work at FAANGs (average comp I'd say between & 400k-600k).

mlthoughts20184• 7 years ago

My counter anecdote is that I left an asset manager about 5 years ago, and the firm I left has grown twofold, mostly hiring quants, has low turnover, excellent work life balance, and bonus payouts have gone up. I kick myself for thinking FAANG was greener pastures because I make less money as a senior engineer in FAANG than a two years out of school quant, while also having a more stressful job.

fdsajkl• 7 years ago

Another advantage of working in Tech is that you can trade on the side. Working in banks or hedge funds usually comes with rules that make it impossible to do any interesting trading. Initially this sounds fair, after a while it becomes a real opportunity cost. Its one reason I moved to Tech from Capital markets.

austenallred• 7 years ago

No it’s not. It’s simply not.

jimmytucson• 7 years ago

When I was interviewing for roles at tech companies while working on Wall St., I remember having conversations with recruiters where I would tell them my salary and my bonus (which was usually 30-40% of my overall comp), and they would say something like, "We don't give out 30% bonuses here. Is that okay?" And I would say, "If you can match the overall comp, then yes, that's terrific."

The point being, bonuses are just a way for finance companies to flex your salary down when the firm has a bad quarter, or you're unvalued or working on an unvalued project. From that standpoint, I don't see bonuses going away any time soon, but if they do then all the better for the employees.

tboyd47• 7 years ago

In this situation, do you think getting "flexed down" by your company is overall better or worse than companies just eliminating your position entirely?

Edit: Did someone read some snark in my question? It was an honest question.

Psyladine• 7 years ago

It's the difference between a screw that can be tuned to performance, or a nail that is hammered in place permanently. bonuses differ from raises in that their isn't an element of entitlement or a long term commitment from the organization.

It's not about being squeamish about eliminating a position, companies have no concerns with that.

boring_twenties• 7 years ago

Of course it's better. If you prefer to leave your position you can always just resign.

bjourne• 7 years ago

It's a false dilemma in most situations. If someone isn't needed, reduced salary won't let them keep their job.

jayd16• 7 years ago

I'd rather have been paid my full comp and then laid off to look elsewhere than have half my comp pulled out from under me.

Bubbadoo6• 7 years ago

Wall St. is equally adept at eliminating positions as well as cutting bonuses. I've seen numerous lay-offs during my time working at bulge brackets, some of which enter and leave business-lines on a whim (ie., FX, fixed-income sales, etc.).

On Wall St., if you're older than say 45 yo and make a good salary for your years of experience, you have a target on your back. This is somewhat the same for tech, but stand outside any bank's office in Manhattan and you'll notice the youth of the employees.

9nGQluzmnq3M• 7 years ago

FWIW, in the more senior ranks at Google, 30-40% bonuses are entirely achievable. L7 bonuses start at 25% and go up for good performance.

laurencerowe• 7 years ago

That 25% bonus is only on base salary which makes up perhaps 40% of total compensation at those levels. Most of the money is as RSUs which makes up about half the total comp.

JackFr• 7 years ago

bonuses are just a way for finance companies to flex your salary down when the firm has a bad quarter, or you're unvalued or working on an unvalued project.

This. At the height of "bonus culture" the smart folks realized that it was a means of trimming comp costs without reducing headcount.

walshemj• 7 years ago

That's the point that a lot of HN readers don't see no Wall street or City firm is going to want to commit to paying more fixed pay over non contractual bonus.

inthewoods2• 7 years ago

Leaving aside hedge funds, the business that I see changing most has to be mutual funds.

I've seen a number of mutual fund managers who generally underperform their index for years operating a relatively high-fee fund (compared with ETFs) getting huge bonuses. It's just ridiculous.

Vanguard and ETFs in general are coming for those people, albeit slowly.

nickles• 7 years ago

mutual fund managers who generally underperform their index for years operating a relatively high-fee fund (compared with ETFs)

There is a bit more nuance here. The fund manager oftentimes has an obligation to follow a given mandate, which may not seek to outperform a given index. For example, investors may want exposure to specific factors (value, growth, momentum, etc.) or asset class (municipal bonds, preferred stocks, etc.). Additionally, investors may seek funds with better risk adjusted returns as opposed to funds with greater absolute returns. In these cases, managers are compensated for delivering on their mandates. The ETF space has similar high fee products.

inthewoods2• 7 years ago

Even given that nuance you'll find ETFs of all types, generally with fees far less than what you pay for the equivalent mutual fund.

Bottom line, for me, is that the active management employed by a large portion of the mutual fund complex provides little additional returns, yet they get paid handsomely for delivering a sub-standard product.

wonderwonder2• 7 years ago

Automation is going to hit the jobs market in many unexpected ways. Interestingly its going to take as big a bite out of white collar jobs as blue collar ones. The majority of trading, accounting, and other number related jobs could disappear along with the truckers, manufacturers and fast food jobs.

We really are entering a new era when it comes to employment and the definition of the 'means of production'. Software and robotics is reaching into uncharted territory.

Should be very interesting in the next decade or two to see if society reacts with the adage to just pull yourself up by your bootstraps or starts to seriously look at a UBI.

harryh• 7 years ago

Technology has been destroying jobs for nearly all of human history and yet here we are with full employment. Those that assert that "this time it's different!" have a steep hill to climb when it comes to evidence.

wonderwonder2• 7 years ago

Full employment simply means people have a job, not that it meets their minimum income requirements. This article is a good example, its stating that they will be doing the same work but just getting less pay for it. These people are at the top of the food chain, but the same thing happens to people at the other end.

wayoutthere2• 7 years ago

Yeah, this right here.

It's taking operational expenses (which cannot be "owned" as a means of production) and converting them into capital expenses (which can be). The more of the work that can be done by things that are "owned," the more the gains accrue to the ownership class.

In previous eras, the ownership class was known as royalty (later as "landed gentry") and they effectively or literally owned the people working underneath them. This removes the ethical problems of owning people while retaining the benefits.

JMTQp8lwXL2• 7 years ago

When it hits society like the opiate crisis has (white, young to middle-aged people) suddenly -- the problem will be deemed legitimate enough to solve.

rjkennedy98• 7 years ago

Julius Krein has written about this and I think he analysis is very prescient: https://americanaffairsjournal.org/2019/11/the-real-class-wa... . He associates it with a much greater malaise across the economy, and the growing gap between the top 10% and the 0.1% percent.

whack• 7 years ago

I've worked in the industry and gotten multiple job offers over the years from them. It still blows my mind that >50% of your compensation is issued as a once-per-year completely-discretionary "bonus". It mostly works fine, due to firms wanting to safeguard their reputation. But if for any reason, you piss off the wrong person or the firm has a bad year, you will lose 50% of your expected compensation... retroactively for the work you had already done in the past year... with no legal protections or recourse whatsoever.

Sure, tech companies have significant bonuses and RSUs as well. But the bonus is more limited in size. And the RSU vesting schedule is more fine-grained, explicitly defined in your employment contract, and the stock valuations are determined by the wider market.

Imagine working in finance for a year, expecting to earn $300k for a year's work, and then finding out at the end of the year that you're only going to get a fraction of that. It blows my mind that this doesn't scare more people.

dasil003• 7 years ago

Well it goes with the culture of investment banking: high-risk, high-reward. Once you are in, of course, they give you the ol’ wink and nod about how much of that risk they are actually taking on.

TrackerFF3• 7 years ago

But then again, what's the retention rate in analyst classes? Probably half of the classes quit after their analyst stint, either for greener pastures, business school, or complete career changes. Some stay for their associate roles, or come back for associate or VP after business school - if they even bother with investment banks.

Adjusting bonuses like that seems like a cruel way of enforcing "up or out". If for whatever reason you don't like some subordinate, or think they're cut out for future promotions, just hand out mediocre bonuses until they jump ship.

I think that in banking (and many other businesses), it's entire possible to be a good / well-performing junior banker, but not necessarily have the skills of succeeding in more senior roles, where your job is very different. (e.g mostly dealing with clients)

Bubbadoo6• 7 years ago

Bonuses were always very political. Sometimes you win, sometimes you lose, despite being on the winning team (desk).

soVeryTired• 7 years ago

People always explain the existence of bonus culture through the firm's ability to manage comp downward in hard times. I'm not so sure though - I've been through hard times at a hedge fund. One year my bonus froze at the previous year's value, and another year the more senior people took a 10% hit to their bonus.

I honestly think bonus culture is about power - specifically the power you're describing there. Your boss's boss can ask you to come in at 2am because if you don't, you risk taking a massive hit to your comp.

The other reason - also related to what you're pointing out - is that if you quit six months into the year, you leave a significant chunk of money on the table. Silicon Valley has similar golden handcuffs in that regard though.

thrav• 7 years ago

I agree, the power is a factor and that it's not about the company having a down year. This exists in Tech Software sales too. It's about not paying full price for a person who doesn't produce.

It's about shifting the budgeted comp of the under-performers to the over-performers. Inevitably, you will end up with a bunch of over-performers killing it, and the under-performers who can't make their number will leave. It's a giant selection process.

Good employees make bank. Bad employees quit and go somewhere with less downside risk.

sokoloff2• 7 years ago

It blows my mind that this doesn't scare more people.

I don’t work for finance anymore, but when I did, the reality was I could walk down the street to another firm (even in 2000/2001) and I was seen as creating value for my current firm and forecast to continue doing so.

If you want to nerf my bonus, you can do it legally, but I’ll take a cardboard box and pack up. If the company overall temporarily stumbled and bonuses are poor, some people leave; others stay and get “made whole” in the future.

michalu3• 7 years ago

No the end of bonus culture is never coming to Wall Street. It sounds nice in theory and makes for a good headline but it never works in real-life, particularly for performance oriented jobs like fundraising, sales, etc.

The reason is that when you work in environment that's all about getting more funds, selling more products it's not a rewarding job like marketing or software development.

The only rewarding part is making money, scoring deals and beating your other colleagues, competitors. Other than that, most people hate these jobs. And even to manage sales teams isn't easy. High-turnover rates, bunch of high-testosterone jerks ...

I'm talking about finance here. Yes software sales or gym membership sales you can be a nice consultative sales person who's simply there to maintain the status quo and benefit from a good product that sells itself.

Turn these jobs into regular consultative sales and you're going belly up. That's because in wall street you don't simply have a game-changing product like some Silicon Valley startup - that's solving real need.

There's no difference in what you offer other than how you can win clients on your side. And most of these clients don't want to deal with average sales dude ... because they're simply not one of them.

The top traders at the floor in one of my past jobs didn't even sell, they talked about cars, yachting, girls and played golf and poker with clients.

And yes, everyone gets bonuses in investment banks, but it's really the commissions they earn and dealmakers who drive the performance.

Bubbadoo6• 7 years ago

Don't know how long ago you worked in trading, but the changes, technically and culturally, have been coming hot and heavy since about 2010. First the technical: as the Bloomberg article points out, most traders today are also coders. Trading floors on the big equity exchanges are empty and quiet as most trades occur electronically. Many seven and eight figure/year NYSE specialists have had to find new careers or retire. You many remember the old NYSE DOT and super DOT program trading systems, both of which sent orders directly to the specialists on the floor, preserving their hold on the exchange-based trades. All of which has gone the way of the dinosaur. Along the way, low, low commissions, low-friction, low touch, low-latency trades are now the new normal.

On top of this, I started in this business almost 40 years ago, when guys were animals on the trading floor. When I think of the misbehavior from that era and the new ultra-PC, metoo social environment, I'm amazed the old culture has all but been erased from today's trading floors. I do miss the levity, the practical jokes and general yuks we had, but that's the price we pay.

michalu3• 7 years ago

Sure, most guys are coders, but every hedge fund, every investment bank 100% relies on people who raise money. To have a hedge fund is all about your ability to attract funds, 95% don't outperform index. Nobody will do this without huge bonuses, they'll simply launch their own funds, hire developers themselves and offer bonuses to other people like they are.

munk-a5• 7 years ago

particularly for performance oriented jobs like fundraising, sales, etc.

I've always been a bit confused and frustrated by this job categorization. Someone good on CS can easily have a stronger effect on contract retention than the flashy sales folks - and all of our jobs are performance oriented, it's just a question of being fired vs. keeping our jobs instead of the magnitude of bonus.

michalu3• 7 years ago

On retention, yes. On closing deals with 0.01% of rich people, largest funds, I can't imagine how.

Bartweiss• 7 years ago

I think the better framing might be "directly observable impact on performance"?

If Alice in sales lands a client by showing off a shiny new dashboard which Bob the programmer built, obviously they both had to perform. But it's fairly easy to run the counterfactual Alice: if Carol didn't land a similar client with the same dashboard, Alice is adding more value. (At least over large sample sizes.) It's very hard to run the counterfactual for Bob: would a worse dashboard have lost Alice's client? Would a better one have landed Carol's? Would another programmer have built something better or worse, in more time or less? Since you only want one of that dashboard, those things are exceedingly hard to answer.

Notably, some companies with consulting/deployed engineers do pay bonuses, because like a physical craftsman they're building many client-specific products. If one person's dashboards consistently land contract extensions than another's they're probably performing better.

(Of course, nothing is ever this clear or easy. If Alice just gets better clients, Glengarry Glen Ross style, Alice didn't actually sell better. If Alice promises a dashboard that doesn't exist yet, leaving Bob too busy to fulfill Carol's client's requests, that's not better either. And at Wall Street is infamously asymmetric, rewarding risk taking rather than actual performance.)

hinkley2• 7 years ago

I knew someone who worked for an R&D company and the lead for grant proposal writing was making just shy of twice as much as the lead developer. Base salary. Now to be fair, this person had tried to leave before so they had to sweeten the pot for retention purposes, but it was serious serious business, and this employee was functionally irreplaceable. I may write all the code we sell but I won't do that if the paychecks stop coming.

I think one of the things that the ridiculously wealthy have trouble finding is people they trust - deservedly or otherwise. Money they've got figured out. Next week they'll have a little more or a little less, but they know where to find it if things get bad.

All that yammering on the phone is building rapport, and putting in time interacting. It doesn't sound that different than the way that informants are recruited (eg, The Like Switch). They feel comfortable with the guy who gave them tips on how to get out of a sand trap. Despite the fact this proves nothing about whether IBM is a good buy right now.

derefr3• 7 years ago

An interesting speculative-fiction writing prompt: performance-based compensation gets declared illegal. All salespeople instantly change careers, because, without performance-based compensation, their jobs are awful and they hate them. Every company in every market suddenly has to get by without the ability to actively get their products into people's hands.

What happens next?

dbspin• 7 years ago

The world is vastly improved as all search results are now 'organic', and people find the products they need without being bombarded with advertising and cheap behavioral economic manipulations to encourage them to purchase products and services they don't need.

pjlegato• 7 years ago

This in fact happened in Russia in the early 20th century.

The results were, among other things:

- allocation of resources happened through centralized planning committees of credentialed supposed experts, rather than organically by decentralized market forces checked and balanced automatically via competition among the actors, leading to huge economic inefficiencies. Perpetual shortages of consumer goods, and at times even basic foodstuffs. 10+ year waits to get a car. Hours-long lines for bread.

- a massive increase in corruption, bribery, and influence trading (collectively known as блат, "favors"[1]), as people turned to unofficial backchannels to further the economic interests of themselves and their organization, since there were no effective legal channels to do so anymore;

- concominant erosion of any notion of popular respect for doing things properly or legally. There simply was no legal way to advance your own economic position.

- The expansion of an institutionalized system of severe punishments to force people to work productively at their jobs anyway, absent any possible reward.[3]

- Eventually, economic and technological stagnation[2]. With no legal economic reward possible for working harder, trying new things, or improving conditions, why bother? Your salary is the same if you succeed, and you'll be punished severely for counterrevolutionary activity if you fail.

[1] https://en.wikipedia.org/wiki/Blat_(favors) [2] https://en.wikipedia.org/wiki/Era_of_Stagnation [3] https://en.wikipedia.org/wiki/Gulag

foobarian2• 7 years ago

The aggressive performance-based compensation loving go-getters become mercenaries or warlords or gangsters just like they used to be in the medieval times and we are all worse off.

I think this is one often underappreciated quality of the corporate world - an outlet for people who would otherwise cause a lot more direct harm.

omarhaneef• 7 years ago

Matt Levine on this very topic:

https://www.bloomberg.com/opinion/articles/2020-01-13/the-ro...

Lots of agreement and disagreement.

neonate• 7 years ago

http://archive.md/MOQhV

xvilka• 7 years ago

I hope more Wall Street companies will use better programming languages and improve the corresponding infrastructure like Jane Street and Bloomberg did with OCaml, like Standard Chartered did with Haskell. I hope to see more adoption of those rather than Python, also hope for getting [1] Rust in this circle.

[1] https://internals.rust-lang.org/t/proposal-business-applicat...

The End of the Bonus Culture Is Coming to Wall Street?

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