Compensation

Last month, Rochedale analyst Dick Bové sent out a note to clients that began with what he dubbed “some interesting stats.” Said stats were salaries of the New York Yankees’ top infielders (“not including promotional deals”!) versus those of JPMorgan’s Jamie Dimon, Wells Fargo’s John Stumpf, Citigroup’s Vikram Pandit, and Bank of America’s Brian Moynihan. The baseball players’ compensation totaled about $80 million, the CEOs’ $65 million. Fair? Bové didn’t think so, noting that while the talentless hacks in the Bronx have won but single World Series in the last 10 years, the banks run by the aforementioned CEOs “impact virtually every American household” (and if pressed to, could surely bring home at least a few Major League Baseball championships).

“Clearly, society values the New York Yankees infield above that of the leaders of the banking industry even without a World Series ring,”  Bové concluded sarcastically, shouting “nailed it” at Mr. Giraffe. Obviously, Bové is of the mind that it’s a crock how little these chief executives are paid considering all they do compared to noncontributing zeroes like Alex Rodriguez and Co. It’s unclear if the former head of MLB’s players’ union caught Bové’s riff or if not but last night he offered something of a rebuttal and, spoiler alert, he thinks Wall Street pay is bull shit. Read more »

Y'all can kiss this ear to ear grin good-bye

In the spring of 2010, almost exactly two years ago to date, the New York Times reported that some of Vikram Pandit’s top lieutenants had noticed “a new bounce in his step” and “a smile on his face,” with one executive speculating that the Citi CEO’s cheer could be attributed to the fact that he was starting to “see the day when he will earn more than $1 a year” as being within reach. On January 18, 2011, that day came. After essentially not receiving a salary since 2008, when he pledged to abstain from getting paid until Citi turned a profit, the board of directors approved “an increase in the annual rate of base salary for Vikram from $1 per year to $1,750,000 per year, effective immediately.” It felt good. Really good. Smiles and bouncing as far as the eye could see good. Know what does’t feel so good? This crap. Read more »

How does a nanny earn more than the average pediatrician? The simple answer is hard work — plus a strange seller’s market that follows a couple of quirky economic principles. A typical high-priced nanny effectively signs her (and they are almost always women) life over to the family she works for…And, alas, it seems that there just aren’t enough “good” nannies, always on call, to go around. Especially since a wealthy family’s demands can be pretty specific. According to Pavillion’s vice president, Seth Norman Greenberg, a nanny increases her market value if she speaks fluent French (or, increasingly, Mandarin); can cook a four-course meal (and, occasionally, macrobiotic dishes); and ride, wash and groom a horse. Greenberg has also known families to prize nannies who can steer a 32-foot boat, help manage an art collection or, in one case, drive a Zamboni to clean a private ice rink. [NYT via BI, related]

You can’t argue with this:

Last year, the cash portion of bonuses was paid entirely in cash.

Well glad that’s cleared up then! Anyway the actual story is not complete nonsense:

Bank of America told senior bankers this week that the cash portion of investment-bank bonuses, the part that is payable immediately, will be paid 25% in cash and the rest in stock that vests immediately, said a person briefed on the matter. The shift applies to bonuses above $100,000. …

The same bankers also will receive a portion of year-end bonuses in the form of deferred stock, as they did last year. The deferred-stock amounts will vary according to overall pay. A bank spokeswoman declined to comment.

Maybe they’re using “cash” in the trading sense – meaning your “spot” bonus, as opposed to your “derivative” bonus, the one forward-settling in three years?
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  • 23 Jan 2012 at 1:58 PM

Bonus Watch ’11: Credit Suisse

A couple weeks back, a report circulated that Wall Street banks were considering freezing compensation for junior employees. The firms were hesitating, however, supposedly on account of the backlash they feared would occur from failing to keep “potential future stars…engaged and happy.” Yes, they were terrified at the consequences of how their junior mistmakers would react to the news and didn’t want to pull the trigger unless everyone promised to do the same, preventing a dire situation wherein a handful of first and second  year analysts quit to join firms where their unique talents would be appreciated. Credit Suisse CEO Brady Dougan, for one, has decided not to be afraid anymore. Read more »

  • 18 Jan 2012 at 12:26 PM
  • Banks

Goldman Sachs Now Paying Employees For A Full Year Of Work

I know I’ve said that the Jamie & Doug in the Morning Show is the best call-in program in finance, given Jamie Dimon’s reliably amusing anti-regulation rant, but the true connoisseur should also really get a kick out of David Viniar’s calmer, wonkier, more NPR-appropriate chat. I certainly do. We’ll maybe have more to say about it later.

My enjoyment is, however, complicated by the fact that at this time of year I feel certain feelings. Specifically, feelings about Goldman Sachs comp, which will be terrible, horrible, down 115%, whatever, and yet … still … somehow … I want it. Have we talked about this before? Sometimes I miss investment banking. A thing that some people not in the industry don’t know about investment banking is that it is an awesome job, in the specific sense that many people would do it for free, or even pay money to do it, and in the even more specific sense that sometimes they do. (For, um, fairly loose definitions of “pay money.”) This happened twice during my time at Goldman. Let’s all luxuriate in a chart:
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  • 18 Jan 2012 at 11:13 AM

Bonus Watch ’12: JPMorgan

The take-away here is put in for that transfer to Brazil? From the front lines: Read more »