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Bonus Watch '14: Congrats On Being An Investment Banker

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Portrait of an investment banker.

Those working in IBD are expected to do quite nicely for themselves come bonus communication day. Others would be smart to remember the ancient Chinese proverb: you'll take what you get and you'll like it/those multi-billion dollar fines aren't going to pay for themselves.

Total compensation for traders, investment bankers and wealth managers will rise 4% in 2014, matching last year’s gain, according to the study by Options Group. But big legal penalties should temper payouts at some banks and put the final figures closer to flat. Financial firms such as Bank of America Corp., BNP Paribas SA, Citigroup Inc. and Morgan Stanley have announced agreements this year to pay more than $1 billion to settle various allegations from regulators or law-enforcement officials. Options Group didn’t factor in such legal costs in its 4% industrywide forecast for this year’s pay, though the recruiter did acknowledge that the regulatory fines and settlements “will negatively impact bonus pools.” [...] Investment bankers are expected to be pay winners during bonus season. Their total pay should rise 9% from a year earlier, their biggest increase since 2009, as the market for mergers, stock sales and other deals heats up. Overall, trader compensation is expected to be little changed from 2013; fixed-income, currencies and commodities employees should see a 1% decline, while stock traders may earn 1% more, Options Group predicted.

Average Wall St. Pay to Rise 4% This Year [WSJ]