After the Obama administration’s pay caps on top bank executives and all the hue and cry over AIG bonuses, compensation must be going down on Wall Street, right?
Workers at the biggest banks are on course to earn as much money this year as they did before the financial crisis, thanks to hefty bank profits so far this year, The New York Times reports.
A review it conducted of bank financial statements shows that six of the largest among them socked away more than $36 billion in the first quarter for employee compensation.
Apparently, bank executives used to the high life don’t change their attitudes easily.
“Like everything on Wall Street, they’re starting to sin again,” Brad Hintz, an analyst at Sanford Bernstein, tells The Times.
“As you see a recovery, you’ll see everybody’s compensation beginning to rise.”
Total bank spending on employee pay may not be rising, though, because the banks have canned so many workers recently.
But the average pay of those who remain appears to be recovering.
Of the big banks receiving government aid, Goldman Sachs put away the most per worker for employee pay during the first quarter, $4.7 billion in total.
If Goldman keeps up that level all year, pay will average $569,220 per worker, almost as much as in 2007, a record year.
Renowned bank analyst Meredith Whitney says Wall Street’s high compensation levels that draw talented people there.
Citigroup recognizes this conundrum, asking Treasury this week for permission to pay out retention bonuses despite getting $45 billion in bailout funds and possibly needing more private capital as well.
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