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Despite Economic Woes, Wall Street Pay Set to Jump

Posted Oct 12th 2010 9:00AM by Douglas McIntyre (RSS feed)

Wall Street employees will make a record $144 billion this year -- a 4% increase from 2009. The Wall Street Journal reported that the compensation figures comprise pay and benefits at "about three dozen of the top publicly held securities and investment-services firms -- which include banks, investment banks, hedge funds, money-management firms and securities exchanges."

Revenue will rise at 29 of the 35 firms that had their pay plans examined by the paper. But the Journal says that revenue at the firms will not rise as quickly as compensation. Wall Street revenue is expected to improve 3% to $448 billion this year compared to last. Employee payout as a percent of revenue will remain flat at 32.1%.

Continue reading Despite Economic Woes, Wall Street Pay Set to Jump

Bankers should be rewarded for their success and pay for their mistakes

Posted Jan 29th 2008 3:18PM by Peter Cohan (RSS feed)
Filed under: Employees, Economic Data, Federal Reserve, Recession

The New York Times agrees with a proposal I've been posting about for months, for example, here and here. The Times suggests that "banks should hold a big chunk of bankers' pay in escrow to be paid out over a long period. Compensation could then be made contingent on the long-term success of each banker's strategies." The only way this could actually happen is if all banks agreed to it. And that won't happen unless the government mandates the idea.

This is a timely discussion because The Washington Post reports today that bankers are expected to earn bonuses of $33.2 billion for 2007 -- just 2% below 2006's record year -- that despite about $100 billion worth of write-downs due to bad loans and a loss of $200 billion in market value for the seven biggest banks.

Not everyone did well. Bonuses were down by as much as 50% to 60% in subprime-mortgage-related departments, while groups such as investment banking took in bonuses that were on average 10% higher than in 2006.

Continue reading Bankers should be rewarded for their success and pay for their mistakes