Bonuses Are Back, Unless You Work For A Hedge Fund Or Citigroup Or An M&A Desk Or In France...


The good old days are back, at least for traders at investment banks. Little more than a year after the credit/economic crisis that was supposed to have changed Wall Street forever, I-bankers are set to be rolling in dough come bonus season, if their firms are lucky enough to have paid back Uncle Sam for his help in, you know, surviving.
And in a major reversal from just a few years ago, alternative investment pros will be worse off, not only than their I-banking peers, but even compared to their own sorry bonuses from last year, despite the big returns many hedge funds and private equity firms have enjoyed in 2009.
The Johnson Associates survey predicts that investment bankers will, on average, get a 40% fatter bonus check this year. But before you M&A guys start pricing Maseratis, the news on the Street is not all good. Those bigger bonuses will be going almost exclusively to traders, with bond traders getting between 50% and 60% more than last year, and equity traders getting between 40% and 50% more. Indeed, if the words "fixed-income" or "equity" is not in your title somewhere, you're probably going to have to make do with less than last year.
Commercial bankers? Expect between 5% and 10% less. M&A advisers? 10% to 15% less. Asset managers, hedge fund guys and buyout kingpins? Cancel Christmas.

You see, all of that stellar performance this year, which may or may not have made up for those catastrophic losses last year Ken Griffin, apparently hasn't fooled enough investors to give hedge and p.e. funds their money back. And until they do, it seems that those who two years ago were preparing to inherit the earth will just have to watch those I-banking dinosaurs have all the fun.
Asset managers and alternative investors--and the poor prime brokerage folks who serve them--won't be the only ones bemoaning a lost world. Citigroup and all those other firms still in the government's debt will remain subject to the always watchful eye of bonus Grinch Ken Feinberg. But even that's preferable to the ultimate indignity of being French.
Offering up another piece of evidence that "right-wing" doesn't actually have any meaning at all in Europe, France's rightist government plans a draconian crack-down on bankers' pay. The French plan all sorts of unpleasant new rules for their banks, covering both their domestic operations and BNP Paribas' soon-to-be-deserted New York office. Among them are--gasp--an outright ban on multi-year guaranteed bonuses and greater disclosure, for shaming purposes.
Big Bonuses Are Back for Many on Street [WSJ]
France Sets New Bonus Rules for Banks [WSJ]


Bonus Watch '12: Ex-Citigroup CEOs

Just because they unceremoniously threw him out on his ass doesn't mean the board wants to see Vikram go home empty handed. Vikram Pandit, Citigroup' ousted chief executive officer, will get about $6.7 million in 2012 compensation and will forfeit some awards tied to a $40 million retention package granted last year. John Havens, who resigned last month as Citigroup’s chief operating officer on the same day as Pandit, will get about $6.8 million for 2012 and also forfeit some awards, the New York-based lender said today in a regulatory filing. Citigroup is the third-largest U.S. bank by assets. “Based on the progress this year through the date of separation, the board determined that an incentive award for their work in 2012 was appropriate and equitable,” Chairman Michael E. O’Neill said in the filing. “While Citi will also honor all past awards that they are legally entitled to, there are no severance payments. Awards to which they are not legally entitled have been forfeited.” Citigroup's Pandit $6.7 Million Compensation For 2012 [Bloomberg]

Bonus Watch '12: Retired Citigroup CEOs

Uncle Vik may or may not be getting a little something extra in his stocking, depending on how generous Citi is feeling. Vikram Pandit, who stepped down yesterday as Citigroup’s chief executive officer, stands to forfeit almost $33 million in cash and stock from a retention package unless the board gives him a payout to ease his exit. Citigroup formulated a plan last year that, based on the firm’s performance so far, would have given Pandit $19 million through a profit-sharing agreement, deferred stock now valued at $9 million and $4.6 million in options, according to the terms of a May 2011 regulatory filing and data compiled by Bloomberg. The plan required Pandit, 55, to be employed at the bank through various payment dates, most of which haven’t been reached. It’s typical for CEOs who resign to forfeit previously negotiated severance and to work out an alternative payout agreement with the board, said Steven Hall, managing director of Steven Hall & Partners, a New York-based executive compensation consulting firm. Pandit getting nothing would signal that “he stood up and said, ‘I’m resigning,’” Hall said. If he gets a payout, “then the question is, did they give him that in order to smooth the path to his resignation or termination? Or did they look at him and say, ‘You know what, you did a hell of a good job during a very, very rough time, we’d like to do something nice for you,’” Hall said. Pandit Could Forgo $33 Million as Exit Voids Retention Plan [Bloomberg]