Viva La Bonus!
By BankersBall on Oct 30, 2008 in Bonuses, Cube Life
Wall Street is holding on…
Industry watchers say that the chance that bailed out banks will forgo bonuses is “slim to none”. However, the bonuses are going to be mighty public this year.
Bloomberg reports that NYSAG Andrew Cuomo and California Rep Henry Waxman are both asking for details on planned bonus payments of banks participating in the TARP program (Troubled Asset Relief Program), which include Bank of America, BoNY, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, Merrill Lynch, State Street and Wells Fargo.
Says Citigroup about how they are dealing with the recent inquiries: It will cooperate with “federal and state inquiries about our global expenditures for wages, health insurance and other benefits, which we believe reflect compensation best practices.”
While the old compensate-or-else maxim still holds true, we wonder whether people will really quit in this environment if they receive a bad bonus. Financial recruiter the Options Group estimates that hedge funds will cut 10,000 jobs, so where exactly would the top talent go?
Readers with jobs: would you walk if you got less than last year? What about less than what you think you deserved?
Bloomberg estimated bonus payouts using an assumed 60 percent of total comp. See the year over year numbers below.
| Wall Street Bonuses 2008/09 | |||
| 9 Mos 2007 & 9 Mos 2008 | Goldman Sachs | Merrill Lynch | Morgan Stanley |
| Total Comp (9 mos 2007) - BN | 16.92 | 13.37 | 11.56 |
| Estimated Bonus | 10.15 | 8.02 | 6.94 |
| Employees | 29,905 | 47,713 | 64,200 |
| Est. Bonus / Employee | $339,408 | $168,067 | $108,075 |
| Total Comp (9 mos 2008) - BN | 11.42 | 10.73 | 11.17 |
| Estimated Bonus | 6.85 | 6.44 | 6.70 |
| Employees | 32,569 | 46,383 | 60,900 |
| Est. Bonus / Employee | $210,322 | $138,749 | $110,049 |
| Est Bonus / Employee - % Diff | -38% | -17% | 2% |
| Source: Bloomberg. Employee figures are as of Q3 earnings and do not include any changes after that. | |||
On Oct 31, 2008, hillz said:
Bonuses will be lower, but they’ll never completely forgo them. Investment banking, private equity, etc. are not exactly dream jobs for junior-to-mid level bankers (hell, a lot of principals and md’s hate it). No one out of college or MBA school dreams about crunching numbers on excel and doing pitchbooks. Take away substantial compensation (where we’re making similar comps to middle America) and a lot of talent will leave.
On Nov 1, 2008, Stan said:
These thieves at the top executive level should receive zero; give bonuses to the rank and file. Where exactly will this “talent” go in the current environment? Hedge funds and PE shops…good luck with that. The execs should go flip burgers.
On Nov 1, 2008, Glen said:
You want to know why these charlatans will get their money and get away with it? Because there are millions of ordinary citizens out there like “hillz” who believe the crap fed to us from the executives unpaid public relations people commonly referred to as the news media.
On Nov 2, 2008, Joe the Unemployed said:
I recently lost my job and have 2 years experience in the real estate industry as an analyst. It’s a complete bloodbath and it seems almost impossible to find an opportunity right now. Most firms are telling me to wait it out until beginning of next year which sounds like decades away. This shit f**king blows!!
On Nov 3, 2008, AL said:
Glen, you obviously aren’t in the industry and are a complete moron.
On Nov 3, 2008, Ned said:
bank execs (and PE&HF) get paid so much because the owners of the bank either don’t know or don’t care. the owners are stockholders (or partners/limited parters in the case of buyside shops). if the owners don’t care, why should the public?
On Nov 3, 2008, Glen said:
Al, you’re so predictable! When you can’t intelligent defend something, attack the messenger. PS: I’ve watched these things from very close proximity for nearly 50 years. What’s your expertise?
On Nov 3, 2008, Joe the Unemployed said:
50 years. I assume you a 72 year old man looking on bankers ball. That’s pretty awesome!
But honestly, I have to say get a life you old donkey!
On Nov 3, 2008, Glen said:
Good show, Joe. You gave me a very good chuckle. You’re right, of course - about both; my age (or close to it), and I do need to get a life. However, those that know me would call me a horse’s a**. Hang in there. I’ve seen this before, and the jobs will come soon. I know it can’t be soon enough for you and millions of others like you.
On Dec 7, 2008, Anonymous said:
Just-in - VP IB all-in $370K @ mid market firm