Wall Street prepares to take a cut on compensation
09 Jan 2012
With fourth-quarter results under preparation and a bleak outlook for the year ahead total compensation for bank executives in the US is likely to be the lowest since 2008, when the financial crisis destroyed some firms and many others were forced to seek government bail out.
While still much higher than rest of the US, pay for some Wall Street workers would work out to be the lowest in years, at a time when the finance industry is being slammed by critics over what is being deemed as obscene finance-industry compensation.
At Goldman Sachs Group Inc, many of the roughly 400 partners would likely see their 2011 pay cut at least in half from 2010, according to people familiar with the situation, the Wall Street Journal cited in a report. The WSJ's sources said pay for some employees in the New York company's fixed-income trading business would shrink by 60 per cent, with some workers getting no bonus.
Morgan Stanley is expected to shrink bonuses for some investment bankers and traders by 30 to 40 per cent from 2010, WSJ quoted some people familiar with the matter as saying.
Pay worries have plagued Wall Street for some months as revenue fell, with listless deal-making, new regulations and anxiety about the global economy. Other pressures include weak financial-company stock prices as also negative public sentiment that led to the Occupy Wall Street encampment in New York.
JP Morgan Chase & Co, one of the biggest banks, would report earnings on Friday, with Goldman and other major banking firms following next week.
