Wall Street Bonuses are Falling Like Home Prices
According to a compensation survey, Wall Street bankers’ bonuses this year will be down by 20-30% compared to 2010. Bond traders could be facing larger cuts, with some taking home up to 45% less. The average managing director will be getting $900,000, down from about $1.2 million last year. Along with these pay cuts, many financial firms are also cutting jobs.
Johnson Associates Inc. projections show that business has been rough for securities firms (NYSEARCA:XLF) and banks (NYSEARCA:KBE) due to worries about the U.S. economy and the sovereign-debt crisis in Europe.
“This year started with great promise for a banner year on Wall Street but hopes for larger bonuses faded over the summer and continue to dim as we approach year-end,” said Alan Johnson, managing director of Johnson Associates.
However, Johnson Associates said that employees in commercial and retail banking, as well as financial advisers who work with high-net-worth clients, could be looking at small increases this year of around 5%.
One bright note: pay trends could improve in 2012 due to the job cuts.
“We’re betting mostly on the cost cuts” to boost compensation per employee, Mr. Johnson said. “Most firms added more people in 2010 and 2011, but now they will get skinnier and more focused.”
Don’t Miss: 5 Wall Street Crisis Films to Watch Now