November 7, 2008 - "Curious what Wall Street Bonuses look like this year"
Summary: Bonuses are down huge on Wall Street this year, but what does that mean relative to everyone?Tax-payer bailout funded bonuses are still astronomical. Take a look to see what the actual figures are!
Wall St. Bonuses Plummeting -- to Merely 'Astronomical' Levels
From CEOs to secretaries, Wall Street's miserable year is about to hit where it hurts. Two compensation experts set to release projections for bonus payments predict they will plummet 20% to 50% from last year.
Even star performers might see their pay stuck at last year's levels, Mr. Karp said, with other "top" talent taking a hit of 20% to 30% and "everyone else" down 40% to 75%.
Compensation consultant Johnson Associates Inc., which has a slightly less somber view of overall payouts, projects that bonuses for chief executives and other top executives whose compensation must be disclosed to shareholders will tumble 60% to 70%.
In particularly hard-hit areas such as structured credit, which churned out collateralized debt obligations that blew holes in many Wall Street balance sheets, managing directors could see their bonus fall 50% to $750,000 to $950,000, according to the Options Group. Their base pay is about $200,000 a year. Vice presidents with three years of experience in the same area could expect a 55% cut in bonus to $200,000 to $250,000, on top of a base of $130,000 to $150,000.
Among investment bankers who maintain contact with corporate clients but don't make trading decisions, managing directors could see their bonus fall 50% to between $900,000 and $1.1 million.
Bonuses will shrink less in businesses that have held up relatively well. In foreign-exchange trading, a managing director could expect a 15% drop in bonus to $1 million to $1.5 million, Options Group predicts.
In commodities, where prices surged and then fell, a managing director could see a 25% drop to a bonus of $3.5 million to $4 million.
Starting next year, some Wall Street firms may attempt to move to a multiyear, performance-based pay structure that would address instances of business groups that report profits one year by taking risks that blow up later, triggering losses.
