The shrinking of Wall Street bonuses

Posted Aug 23rd 2007 8:30AM by Douglas McIntyre
Filed under: Forecasts, Industry, Employees, Goldman Sachs Group (GS), Morgan Stanley (MS), Lehman Br Holdings (LEH)

Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE: MS) may see their expenses fall this year, but for all of the wrong reasons. Based on information gathered by Bloomberg, the sub-prime mortgage crisis and falling LBO and private equity activity could cut Wall Street bonuses by as much as 5%.

In some of the investment bank units hardest hit by market problems, incentive pay-outs could drop much more. The news service reports that "Hedge-fund investment managers, whose average payout climbed as much as 15 percent last year, may see a drop of 5 percent to 10 percent in 2007."

If pay packages drop, there would be a certain poetic justice for shareholders. Shares in Goldman are off from their 52-week high of $233.97 and now trade at $177.89. Lehman Brothers' (NYSE: LEH) stock has gone from a high of $86.18 to $59.54.

Of course, most investors in the companies would trade big banker pay days to have the stocks back at their highs.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Tags: Goldman Sachs, GoldmanSachs, GS, inthenews, LEH, Lehman, Morgan Stanley, MorganStanley, MS

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Reader Comments (Page 1 of 1)

8-23-2007 @ 1:33PM

Alastair said...

Bonuses? These shills and charlatans will be lucky to even have a job when the next stage of Bush and Bernanke's crash comes. If you're planning to move to NYC, be patient, you may be able to get plenty of Manhattan apartments real cheap and real soon!

8-23-2007 @ 2:13PM

Suzanne said...

A lot of people should have been replaced by technology years ago. Wall Street and all its "hanger-oners" should have been cut 4-5 years ago. Way too many employees in brokerage firms.

8-23-2007 @ 2:23PM

Harold said...

Wall Street has been VERY slow to make full use of technology...and drop prices. No one want to give up those million dollar packages! So they just continue to screw the public.