Wall Street bonuses hit bottom and are poised to rebound about 20 percent this year as markets improve, according to Alan Johnson, president and founder of compensation consulting company Johnson Associates Inc.
Every year since the 2008 crisis, investment bankers at many of the large global banks have seen less and less of their bonuses in up-front cash and more in deferred stock and staggered cash payouts pushed out to two to three years down the road. During the 2011 bonus season, banks including Morgan Stanley, Barclays plc and Deutsche Bank AG have employed even stricter deferral policies, reportedly enacting up-front cash caps on bonuses of $125,000, £65,000 ($103,000) and $265,000, respectively.
MBIA did not award bonuses to its top executives in 2011, but only after its regulator pressured the beleaguered bond insurer to withhold the payouts, people briefed on the matter said.
UBS (UBS) on Tuesday became the first investment bank to announce a major “clawback” of bonuses after a rogue trading scandal at the Swiss bank last year led to deep losses.
NEW YORK (Dow Jones)–Goldman Sachs Group Inc. (GS) paid its employees an average of $367,057 for 2011, a decline of 15% from a year ago, reflecting the tough times experienced by banks and securities firms since last spring.
The investment bank, known for rewarding its bankers and traders with the highest payouts among Wall Street investment banks, set aside $12.2 billion for compensation and benefits for the full year, down 21% from the $15.4 billion it allocated a year earlier. Last year, Goldman paid employees an average of $430,700….
“Most of us had been anticipating a bad fourth quarter for Wall Street and [the banks] definitely came through with that,” said Alan Johnson, managing director of Johnson Associates, whose firm publishes a widely watched compensation survey.
Johnson said that while compensation disclosures so far have reflected lower payouts, they don’t necessarily tell the full story.
“Compensation is down a lot for most, even though it doesn’t look like it,” he said, referring to previous stock awards which are included in the current figures and tend to somewhat cloud results.
When asked about his job at cocktail parties, Alan Johnson has a curiosity-piquing line.“You know those big paydays on Wall Street?” he says, typically waiting a beat to deliver the punch line. “I have something to do with them.”