BofA, Credit Suisse The Latest Banks To Reduce Banker Bonuses

As Wall Street adjusts to a less profitable chapter in its history, bankers may be finally feeling the pain that many American workers have known for some time.

Slow global economic growth and a boost in regulations are among the reasons banks raked in lower profits last year. As a result, institutions ranging from Bank of America and Credit Suisse to Goldman Sachs gave lower bonuses to employees for 2011. In addition, some firms cut the size of compensation to lower levels than at any point since the 2008 financial crisis.

BofA, which informed employees of their bonuses on Thursday, has decided to freeze base salary levels and limit cash bonuses to $150,000 for some bankers, Bloomberg reports. Employees who are netting as much as $1 million in total bonuses will receive limited cash, with the rest of their bonuses being diverted into BofA shares.

Credit Suisse, a major Swiss bank, also told senior bankers that their total compensation would be 30 percent lower on average than in 2010, according to a separate Bloomberg report.

These recent moves mirror pay cuts across the banking industry. Bonus day at Goldman Sachs was "a bloodbath," one mid-level employee told CNBC. The investment bank set aside 21 percent less money for compensation and benefits than in the previous year.

Many Citigroup employees received bonuses that were smaller than is typical, or even nonexistent for 2011, according to The New York Times. JPMorgan Chase set aside 9 percent less money in compensation for its investment banking unit, the Wall Street Journal reports.

In addition, Morgan Stanley capped 2011 cash bonuses at $125,000 and didn't give cash bonuses to its top executives, according to The New York Times.

But some Wall Street workers had more pressing issues to contend with last year than simply a cut in pay. Many bankers already have been forced to leave their jobs, with Wall Street laying off more than 200,000 bankers in 2011 alone.

Some banks continue to cut back. Vikram Pandit, chief executive of Citigroup, said in an interview with Bloomberg Television that he plans to slash Citigroup's expenses by $2.5 to $3 billion in 2012. Citigroup already is laying off 5,000 employees, according to Bloomberg News.

Comments

[Kammie321456]

08:23 AM on 02/19/2012

Where is all this BIG money coming from, maybe all the hidden charges, that are hidden from the people. Why should all these big CEO's get BIG BUCKS for doing wrong deeds. Question is how do you sleep at night, when people are being forclosed. Some can't even pay their bills, and YOU are worried because you got a cut in your hefty bonus. Get real...I think i need a tissue, for all these tears..lol

[knott wrench]

06:13 PM on 01/28/2012

These bankers were supposed to be the " Best and Brightest" in order to justify these bonuses. Now the Global economy is slowing. What Happened?

Ooops! These "Bright Bulbs" hoarded all of the money ($2-3 Trillion Dollars) they should be loaning out, collecting interest on it. So, they only have themselves to blame.

They saying goes: "You have to spend money to make money" Don't invest it and you don't make anything.

[cam1002]

08:57 AM on 01/28/2012

Oh my, I am so upset. (Insert sarcasm icon here).

[blood1]

08:05 AM on 01/27/2012

These employees may be feeling pretty bad - "a lttle cash" but STOCKS in my company -that I have to hold onto? Gee whiz, what ever happened to company loyalty? Are these guys seeing visions of Enron - all their money tied to a losing company?

Think back a few years when the GOP complained that the entire problem was due to the average American was at fault for not saving enough? Now that the tables have turned and these same employees who chuckled and had zero sympathy for the average American are getting a dose of reality.

Somehow making a CEO making a mere $10M/year is not going to make anyone shed any crocodile tears. Maybe he'll have to bring some of his dollars back from the Cayman's.

[lofttypeofaview]

07:49 AM on 01/27/2012

Domino effect equals karma!

[moose and squirrel]

07:47 AM on 01/27/2012

And now, for your entertainment, i shall play a tune from the world's smallest violin.....

[clearasmud]

07:33 AM on 01/27/2012

So, all these banks that are doing so bad. The employees are getting the axe. But, it is the CEO and the Board that created the problem. The employees should demand a clawback of Executive Bonuses (that were heavily padded by the taxpayer bailout), since they did only what they were told to do, under the Executive Plans.

But, we all know that won't happen. Bank Executives never take the blame themselves. Just look at Jamie Dimon.

[Sheng Paule]

03:08 AM on 01/27/2012

Keep lowering that bonus....Zero dollars for zero success

[AlanBannacheck]

02:18 AM on 01/27/2012

What goes up must come down. Even banks aren't immune to the end of cheap and exploitable energy. More to come of this slow decline.

[Steve Rockett]

01:55 AM on 01/27/2012

Good. Everyone needs to make sacrifices.

[Bloggerrogr]

12:49 AM on 01/27/2012

Crash the banks until they holler 'uncle' and BEG to be nationalized. Then regulate them in such manner as they will never again be able to wield such power ever again.


FWIW

[Steve Rockett]

01:55 AM on 01/27/2012

Strong regulations and a few more in jail should do the trick.

[maidenofdforest]

12:45 AM on 01/27/2012

If you're an employee with a job, be thankful. If you're an employee at Wall Street waiting for that bonus, scrap the expectations and be grateful you have something to lean on. A lot do not have jobs nowadays.

[builderman55]

12:37 AM on 01/27/2012

Awwww, stop already--I'm running out of hankies...

[sadwitness]

03:44 AM on 01/27/2012

Bankers in pain, my favorite bedtime story

[victorianism]

03:30 AM on 01/28/2012

If that pain is to be taxed dearly, then your favorite will become my sweetest lullaby.

[Capn Scott]

11:51 PM on 01/26/2012

"BofA, which informed employees of their bonuses on Thursday, has decided to freeze base salary levels and limit cash bonuses to $150,000 for some bankers, Bloomberg reports. Employees who are netting as much as $1 million in total bonuses will receive limited cash, with the rest of their bonuses being diverted into BofA shares."

So, raise your hand if you believe that a $150,000 bonus sounds 'limiting' to you. Hell, most Americans don't make half that much as a yearly salary, let alone receiving that much as a 'bonus'.
Also raise your hand if you believe that 'netting as much as $1 million in total bonuses' ....and having it comprised of 'limited cash', instead receiving stocks...sound like something you'd complain about.

What's next, you're going to complain that the 24k gold leaf on your Rolls Royce wheels is peeling off before the warranty on them expires? I mean, because....who among us can't relate to that, right? lol!

[GBPackerfan]

10:56 PM on 01/26/2012

"How was work today, Tad?"
"Well, Muffy, I'm afraid I received terrible news. My bonus is only $150,000.00."
"Oh my Gawd! Will we be able to continue to afford the private school for the children and maintain the summer house in the Hamptons?"
"I think so. But buying a new Escalade this year is out of the question."

Don't think the rich don't suffer during these times. They do. They do.