Word: salomone
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Baseball and investment banking have a lot in common. in both places, the players are never satisfied, no matter how many millions they take home. Over on Wall Street, two dozen honchos in pinstripes have grabbed their briefcases and walked out of Salomon Brothers. They've switched to other teams where the owners are waving more cash their...
...Salomon Brothers, the base salary is $150,000 a year, and at other investment houses it ranges as high as $450,000, far less than the average player in baseball gets. But that's only the subsistence wage, to tide people over so they can put squab on the table and pay the housekeepers until the real money is doled out in annual bonuses. These bonuses run into seven figures, and if you've had a great year at the computer terminal, you could take home twice as much as Barry Bonds. And, as in baseball, you get paid...
...baseball used to, before they canceled the season. One of the longest-standing traditions is that if you make money for the firm, you get to keep a huge chunk of the profits yourself, but if you lose money for the firm, the firm covers the losses. For instance, Salomon Brothers lost $399 million last year, the banking version of finishing in the cellar, yet not a single banker or trader offered to help Salomon by reaching into his or her own pocket, which had been stuffed with bonuses in the past...
...fact, it's a dispute over bonuses that caused the recent walkout. Salomon's principal owner, Warren Buffett, dared to break with tradition and challenge the pay system, the way baseball owners have. Being a no-nonsense businessman from the Midwest and also a team player, Buffett introduced the notion that since Salomon was a business as well as a team, the players shouldn't expect bonuses if the team screwed up. This did not go over well in the clubhouse...
Ultimately, many airlines would be happy to eliminate tickets altogether. "This is definitely part of a trend to reduce passengers' reliance on travel agents and ticketing," says Julius Maldutis, who follows the airline industry for Salomon Brothers. Valujet, a profitable 16-month-old Atlanta carrier that mostly plies the Southeast, has never issued tickets; travelers get confirmation numbers that they use to pick up boarding passes at airports. Southwest Airlines began offering all passengers the option of ticketless service this month. Even giants like United and Delta are testing similar systems. "As Delta becomes more competitive," says vice president Vincent...