Wall Street Employees Getting Smaller Bonuses This Year: Survey
It's been an underwhelming year for Wall Street, and traders will likely see that reflected in their bonuses, according to a new report.
With the recovery still weak and the market volatile, Wall Street employees expect to take home year-end bonuses that will be an average of 20 to 30 percent smaller than last year's, according to a new survey by consulting firm Johnson Associates Inc., cited by the Wall Street Journal.
The banking industry has already been at pains to cut costs, as evidenced by layoffs at Bank of America, HSBC, Goldman Sachs and elsewhere. Revenue from retail banking is down at many major institutions, forthcoming regulations are set to be implemented with unknown consequences for the banks, and analysts can't agree whether the next several months will bring tens of thousands of job cuts, or hundreds of thousands.
In addition to scaling back their payrolls -- often by culling the most inexperienced and lowest-paid employees -- Wall Street firms are looking to shore up their balance sheets by awarding smaller bonuses.
Those haircuts won't happen in a uniform manner, according to Johnson Associates Inc., the compensation consulting firm that released its projection on Monday. Fixed-income businesses will take the biggest bite, with bonuses expected to be 35 to 45 percent smaller than last year. Investment bankers are on track to receive 10 to 20 percent less than their 2010 bonuses, while senior managers are looking at a 20 to 30 percent drop.
Outsized compensation for financial employees is one of the major grievances of Occupy Wall Street, the now-global protest movement whose members oppose what they call a financial and political system rigged in favor of the rich.
The report from Johnson Associates mentions "Occupy Wall Street type protests" as one of the factors putting a "public spotlight" on the issue of compensation, suggesting the demonstrations might be playing a role in decisions about bonuses this year.
But while the financial industry has performed below expectations recently, its employees are doing just fine relative to society as a whole. The average salary for a New York banker last year was $361,330, according to The New York Times -- more than 13 times the median wage for all Americans, which was $26,364 in 2010. And since President Obama took office in 2009, banks have grown larger and Wall Street companies have earned more than they did during the eight years George W. Bush was president, The Washington Post recently reported.
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The Huffington Post Alexander Eichler First Posted: 11/08/11 12:51 PM ET Updated: 11/08/11 12:51 PM ET