Tags: Wall | Street | Pay | Cuts

WSJ: Wall Street Banks Brace for Massive Pay Cuts

Monday, 09 Jan 2012 01:18 PM

Wall Street banks are set to report year-end earnings and since business wasn't that great for 2011, bonuses won't be so hot either.

Big Wall Street banks set bonuses at around the end of the year and 2011 will probably be the worst for such compensation since 2008, The Wall Street Journal reports.

At Goldman Sachs, most of the roughly 400 partners can expect to see their 2011 pay cut at least in half from 2010, sources tell the Journal, while Morgan Stanley is expected to shrink bonuses for some investment bankers and traders by up to 40 percent from 2010.

"Companies definitely have to realize the party as they know it is
over," says Rose Marie Orens, a senior partner at Compensation Advisory Partners, a New York firm that works with compensation committees at public-company boards, the Journal adds.

Other experts agree that normally hefty bonuses won't be so hefty this year.

"Obviously this is not a good year for Wall Street compensation and an awful lot of the pressure is going to fall on managing directors," Brad Hintz, research analyst with Sanford C. Bernstein & Co., ABC News reports.

Compensation is ultimately tied to market performance, and volatile markets in 2011 will cut into bonuses, Hintz adds.

"Becoming a partner at a Wall Street firm is very much like becoming an NFL lineman," Hintz says, referring to their job's lifespan of five or six years.

"After a while, your knees go and you're politely shown the door."

© 2017 Newsmax Finance. All rights reserved.

1Like our page
2Share
249
2012-18-09
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved