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Goldman guilty trader’s pitiful salary tells story of GFC

Matthew Taylor Goldman Sachs

Source: Bloomberg

Bloomberg is reporting former Goldman Sachs Group (NYSE: GS) trader Matthew Taylor pleaded guilty to concealing an unauthorised $US8.3 billion trading position in 2007, causing the bank to lose $US118 million.

Taylor, now aged 34, told the judge he took the position to boost his standing, and his bonus, at Goldman Sachs.

Get this…

Taylor’s salary in 2007 was $150,000 and he expected a $1.6 million bonus.

So Taylor broke the law by concealing his position. He’s staring at some serious jail time.

Rule number one for investment bankers is don’t break the law.

Rule number two is maximise your bonus, because your ‘pitiful’ base salary will never buy you a Ferrari.

Put it this way…

If that was the make-up of your salary package, wouldn’t you bet as much of the bank’s money as legally allowed  in order to earn the maximum possible bonus for yourself?

The worst thing that can happen to you is you lose your job.

The worst thing that can happen to a “too big to fail” bank is the taxpayer bails them out. Again.

Heads they win. Tails we lose.

And while remuneration packages like the above remain in place, you can be sure a new financial crisis will again emerge…it’s just a matter of time.

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