Goldman Sachs Bankers Could See 50% Bonus Compensation Plunge
A virtually flat year on Wall Street could be translating to decreased pay for big bank executives. Yahoo! Finance reports that while still hefty compared to the pay in many industries, this year’s total compensation may be the lowest that the banking (NYSEARCA:KBE) industry has seen since 2008 when the financial crisis hit.
Yahoo! Finance says that sources believe that the 400 partners of Goldman Sachs Group Inc. (NYSE:GS) may see as much as a 50% deduction in their 2011 pay compared to 2010. Fixed-income traders could have their income reduced by up to 60% and some may receive no bonus at all. Other sources say Morgan Stanley may cut their bonuses by 30-40% from 2010.
Earnings reports from many big banks will start rolling out this week starting with J.P. Morgan (NYSE:JPM). 2011 has proven to be a tough year for the financial sector considering the poor public image resulting from the financial crisis, lackluster stock performance, and rigid industry regulations. It’s expected that most banks will cut their losses by slashing employee compensation in order to keep profits up and satisfy stockholders. Yahoo! Finance quoted Rose Marie Orens, a senior partner at Compensation Advisory Partners who said, “Companies definitely have to realize the party as they know it is over.”
Further Reading: Goldman Sachs Could Double Its Assets By Acquiring Deutsche Bank>>
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