Bonus Watch '12: Société Générale

The French bank has some very angry little mistmakers on its hands. "Societe Generale paid their 1st year investment banking analysts between 15k-50k in bonuses. Most juniors were furious, especially since this is 20-40% lower than Street. The firm is continually declining in the Americas within investment banking, and has reduced tremendous headcount over the past year. It relies heavily on trading revenues from derivatives, with very little resources dedicated to M&A, ECM, and DCM. In a period where other banks are cutting operations in the US, SocGen leads the pack in decline. In February 2012 head of CIB, Didier Valet, said that the firm would not compete with bulge brackets. Regardless of these negatives, SocGen continues to say that it is a top investment banking player. They are not, and juniors on Wall Street should know before entering into this trap."

Author:: Bess Levin
Updated:: Jan 14, 2019
Original:: Jul 17, 2012

The French bank has some very angry little mistmakers on its hands.

"Societe Generale paid their 1st year investment banking analysts between 15k-50k in bonuses. Most juniors were furious, especially since this is 20-40% lower than Street. The firm is continually declining in the Americas within investment banking, and has reduced tremendous headcount over the past year. It relies heavily on trading revenues from derivatives, with very little resources dedicated to M&A, ECM, and DCM. In a period where other banks are cutting operations in the US, SocGen leads the pack in decline. In February 2012 head of CIB, Didier Valet, said that the firm would not compete with bulge brackets. Regardless of these negatives, SocGen continues to say that it is a top investment banking player. They are not, and juniors on Wall Street should know before entering into this trap."

Junior mistmakers at the Royal Bank of Canada received their numbers last week. 1st Year (Top Tier): ~$52,000 2nd Year (Top Tier): $65,000 3rd Year (Top Tier): $85,000

Nothing has been finalized, though according to a spokesperson for the bank, anyone who'd like to take a little initiative and just would be helping the bank out big time.

The look on SocGen's face as a judge berated the bank for axing Kerviel probably made up for it.

Back in January, Morgan Stanley CEO James Gorman sent a simple messages to his employees, who had been grumbling about their pay: STFU or GTFO. "You're naive, read the newspaper, No.1," Gorman told Bloomberg he would say to any members of his staff that wanted to give him lip about their compensation to his face. "No. 2, if you put your compensation in a one-year context to define your over all level of happiness, you have a problem which is much bigger than this job. And No. 3, if you're really unhappy, just leave." Today, in an interview with the FT, Gorman reiterated his stance and added that in addition to reducing compensation for current employees, the bank will likely be drastically cutting pay for future analysts. If anyone has a problem with that, consider applying for a gig at Bank of Mythical Pre-Crisis Era Bonuses. Alternatively, Gorman is happy to discuss a compensation plan in which you'll be awarded shares of his foot in your ass, which vest immediately. In the latest sign of the pressure Wall Street is under to cut costs and address high pay levels, James Gorman, chief executive, said that staff and remuneration would have to be sacrificed as banks cope with lower profits. “There’s way too much capacity and compensation is way too high,” Mr Gorman said in an interview with the Financial Times. “As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.” Morgan Stanley itself is already axing 4,000 jobs, 7 per cent of its workforce, by the end of this year. In the new year, Mr Gorman said, the bank will consider its next round of cost-cutting, including lower pay and bonuses. News of further pay cuts, including potentially for new entrants at the investment bank, comes just weeks after Goldman Sachs confirmed it was overhauling its well-known entry-level programme for analysts. Goldman was said to have tired of the number of analysts in the programme who left the bank for hedge funds. Mr Gorman said that Morgan Stanley will probably keep its own analyst programme, but pay could be reduced significantly. Morgan Stanley Chief Warns On Wall Street Pay [FT] Earlier: James Gorman To Employees: STFU Or GTFO

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]

Numbers for first and second year analysts (who are not happy). "It's been two weeks since UBS numbers came out and nobody wants to talk about it, for obvious reasons. Second years (base: 80k) ranging 45-65k and heard of some first years getting around 40k (base: 70k). And they could only achieve these numbers ("in line with the street") after firing 30+ analysts right before communication day."

According to "revenue compensation trends," though good vibes and happy thoughts could prove them wrong. Wall Street’s cash bonus pool is likely to fall for a second straight year as the financial industry grapples with market turmoil, economic weakness and new rules, New York state Comptroller Thomas DiNapoli said. Revenue and compensation trends have “edged downward” since February, when DiNapoli estimated that the 2011 pool for Wall Street declined by 13.5 percent to $19.7 billion, the comptroller said today in a report. “Based on those trends, the total cash bonus pool for work performed in 2012 is likely to decline for a second year in a row,” DiNapoli said in a statement. The last time the pool shrank for two consecutive years was in 2007 and 2008, at the beginning of the global financial crisis, according to the comptroller’s office. Wall Street Bonus Pool Seen Shrinking for Second Straight Year [Bloomberg]