Although final decisions are weeks away, some reports issued recently are predicting that average 2011 bonus compensation at global investment banks will drop 15% to 30% from last year.* ( At the same time, compensation in the rest of corporate America is rising, mostly due to aggressive cost cutting.)[pullquote]Even these drops won’t stop finance from being one of the most lucrative professions…[/pullquote]
Banks, too, have been cutting back during the first three quarters of the year and have reported that business has been hurt by global economic uncertainty, volatile financial markets and tough new regulations from Washington. Investors have sent shares of investment banks and brokerages down 43% this year.
But the cutbacks have not hit all divisions equally according to The Options Group, a compensation consulting firm.
“Traditional mergers and acquisitions bankers may see their pay fall 14%, but bond traders face 33% pay cuts due to the rock-bottom interest rates that make trading difficult”.
NOTE: “Even these drops won’t stop finance from being one of the most lucrative professions; for instance, Goldman Sachs set aside enough money through the first nine months of the year to pay each of its 34,200 employees an average of $292,000 in total compensation this year and that is likely to grow in the fourth quarter.”*
*Los Angeles Times, Dec 3, 2011 “Wall Street Compensation Expected to Fall….”Nathaniel Popper, reporting from New York.