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Signing bonuses on Wall Street: Do they really still exist?

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I've never gotten a signing bonus. In my 20 years of work since graduating from college, I've been hired for seven full-time positions and it never really occurred to me to ask for one. Usually I was happy to get the position -- a new challenge! -- and a salary increase.

So, it grated a bit when l read about bankers at the defunct Lehman getting signing bonuses to stay at firms that acquired their divisions in bankruptcy proceedings. The Financial Times reported that Nomura, which bought Lehman's European and Asian divisions, gave bankers cash equal to last year's bonus if they agreed to stay at Nomura for a year, for example. The article covered a "scramble for talent" that took place when all those Lehman execs were suddenly available for hire.

Bank of America is also reportedly promising Merrill Lynch brokers a bonus as big as as 100% of the revenue they generate to stay after the deal is closed -- even though the sale was done to avert Merrill's demise.

Apparently even undergraduates are still getting signing bonuses when hired at investment banks, according to web site Banker's Ball. The average salary posted in the comments is about $60,000 with a $10,000 signing bonus (plus a target $30,000 or $40,000 year-end bonus depending on the position).


Given massive firings on Wall Street, are those payouts really necessary? None other than Goldman Sachs said on Oct. 23 that it will be laying off 10% of its global workforce, or about 3,000 employees. Did Nomura really have to worry that top talent would walk? Or was it just good for morale to keep the cash flowing? Can the firms really claim a need to pay such large bonuses to keep talent in a year where their bad decisions have nearly brought about the collapse of the global financial system?

Several recent articles, including on BloggingStocks, have pointed out that bankers and traders will still get bonuses this year that would seem lavish to most other industries (even if they are smaller than they are used to. Bloomberg reports that Morgan Stanley (NYSE: MS), Merrill Lynch & Co. (NYSE: MER) and Goldman Sachs (NYSE: GS) have each set aside around $6.5 billion for bonuses. Time reports that Wall Street bonuses would have been much lower if it weren't for the government bailout, even though that legislation restricts salaries of the top five execs at participating firms.

Signing bonuses are just another flavor of bonus bonanza that those who work on Wall Street have come to expect. I know that so I shouldn't be surprised they are still available.

Wall Street pays less and it pays fewer people. But it still pays and pays.

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Last updated: July 09, 2009: 08:53 PM

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