The world is up in arms about the $100 million bonus for Andrew J. Hall, the energy trader and 58-year-old head of Phibro, which in turn is part of Citigroup, 34% of which will soon be owned by the American people.
But who cares? This is hardly new. Most people when asked about bonuses shrug their shoulders, and say plus a change, plus c’est la mme chose, in a sing-song voice.
Oddly enough, they are right.
Hark back to 1709, when Wall Street was probably some ditch in old New Amsterdam, or new New York. The Duke of Marlborough, after a series of successful M&A deals in Europe, was awarded 5000 per year as a bonus, until Queen Anne died in 1714. This was extended until the Duke died in 1722.
5000 in 1709 equals 7,605,799.14 in todays average earnings. Therefore, in total until his death, he received around 98.8 million. Clearly it seems that 100 million has been the standard rate for an exceptional bonus for some time.
There are some differences. The currency, obviously, and the fact that the 1st Duke led a somewhat impoverished childhood, rose up the ranks, spent a spell in the Tower of London, then won a series of improbable victories across Europe, and became known as one of the most successful generals in English military history. Mr Hall stands to make $100 million in one year from betting on oil. But these are minor details.