Skip to main content

Bonus Watch '12: Now With Less Cash

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]
  • Author:
  • Updated:
    Original:

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]

Related

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."

Layoffs/Bonus Watch '12/13: Morgan Stanley

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

Bonus Watch '12: Jefferies Has Got Your Cold Hard Cash Right Here

Back in the day, as in pre-crisis, bonus season on Wall Street was a happy time. Sure, you still had your miserable pricks who would bitch and moan about the fact that they hadn't gotten as much as the guy who sat next to them, even they the guy who sat next to them was a "non-contributing zero who wouldn't recognize alpha if it bit him in the ass," but prior to to fall 2008, anyone who was unhappy about his or her bonus was a) quibbling over receiving a huge sum of money instead of an imperial fuck-ton of money and b) in a position to actually make good on a threat to jump ship, since firms were hiring. Now, with a few exceptions, bonus season makes people feel sad. Angry. Impotent. Like the world is out to get them. Not only has the total amount of one's bonus come down, but many companies have decreased the cash portion, while increasing the deferral period on stock to, in some cases, almost half a decade. Then you have Jefferies. Last year it let employees decide between an all stock bonus or an all cash bonus with 25% lopped off.  This year the investment bank-cum-butcher shop isn't even forcing anyone to choose, instead dumping a bag of cash on everyone's desk and reminding them who loves 'em.

Bonus Watch '12: UBS

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."

Bonus Watch '12: JPMorgan

Li'l Dimons started receiving numbers today. First year analysts (base 70k): Bottom tier: 40k Middle tier: 50k Top tier: 55k Second years (base 80k): Middle tier: 65k Top tier: 70k

Bonus/Layoffs Watch '12: Barclays

The juniorest of mistmakers have received their numbers (and a little perspective). "Barclays first year analyst bonuses: massive range, 20k-55k. Analysts got 20k, 25k, 35k, 40k, 45k, and 55k at top. Most groups are expecting cuts within the next few months so while some people are dissatisfied, most are just happy to have jobs."

Bonus Watch '15: Wall Street Basically Living Paycheck To Paycheck Now

In an unimaginable nightmare from which no one can wake, bonuses grew a mere 2% last year.

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]