Monday, February 16, 2009

The Ghost Of Christmas Past

Amid all the hoopla over banks' bonuses, this story stands out as the act of one person - Leonard Abess Jr., former chairman of City National Bancshares - in the financial services industry who understands how such things are supposed to work.
"It didn't feel right getting the money myself ... Those people who joined me and stayed with me at the bank with no promise of equity - I always thought someday I'm going to surprise them."

So in early November, all 399 workers on staff - tellers, clerks, bookkeepers - and 72 former employees received bonuses based on years of service. That month, Spanish bank Caja Madrid paid $927 million for an 83 percent stake in the company.

The bonuses came directly from the sale of City National to Caja Madrid, out of Abess' profit. In his words, "I sure as heck don't need (the money)." Some long-serving employess received over $100,000; many received five-figure sums. In addition to the bonuses, the bank is offering them high-rate certificates of deposit in which to deposit the funds.

Too often we hear of "merit" bonuses paid to the top executives of financial firms whose greed fueled the current crisis: modern-day tales echoing themes from Nicholas Nickleby and David Copperfield. Here at last we have a tale of one banker who gets it right in true A Christmas Carol style - and makes sure his people get treated right as well.

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