Wall street executives get actual bonuses based on profits on paper. Let's say that they bought a stick that increased a lot. But they didn't sell it. But they still got bonuses (actual money) based on profits on paper. Now, if the stock falls then the profits gets wiped out but the executive still has the money.
This is not fair at all. Either he should return the money or he should get bonus only on actual and real hard cash profits (that is, they need to sell the stocks at a profit). If this was done from the beginning then we wouldn't have seen the financial crisis like this because no one would have bought sub-prime so much (packaged in exotic investment vehicles). To get bonuses, they would have had to show real profits from sub-prime and then they wouldn't have bought so much sub-prime.
