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Subscribe to RSSMany on Wall Street will find the holidays less merry this year thanks to thinner paychecks.
Year-end bonuses, a much beloved perk for many Wall Street employees, are expected to plummet by as much as 40 percent, according to a study by executive search firm Options Group in the Wall Street Journal Monday.
Annual compensation for workers at Wall Street firms could dip by 27 percent to 30 percent, and the areas that will see the biggest drops include currencies, commodities and bond trading, the study showed.
The drop in pay for employees isn’t a function of an industry that’s realized obscene payouts aren’t a good move in the face of public outrage, including Occupy Wall Street’s efforts, said Alastair Smith, a professor of politics at New York University and author of “The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics.”
“It’s exactly the opposite,” he said. “The simple problem is companies haven’t made as much money and that’s the simple reason why they’re not providing big bonuses.”
But there’s no need to make an extra request with Santa on behalf of Wall Street employees, especially traders. Even with the drop in bonuses and overall pay, such positions are still expected to bring in what would be a great present for any other worker. A bond trader who is also a managing director is likely to make about $1.8 million in annual compensation, the Journal story reported and Options Group spokeswoman Jessica Lee confirmed.
Compare that to the average earnings for U.S. employees overall, which was about $795 weekly, or $41,340 a year, according to wage data for October released by the Bureau of Labor Statistics.
Still, employees outside of the gilded Wall Street bubble don’t expect a lot from their bosses when it comes to year-end bonuses.
An employee incentives company Parago surveyed workers about what they they’d be happy with this year when it come to holiday rewards, and nearly 70 percent said they didn’t expect anything. Of those who did want some sort of incentive:
* 84 percent reported that an end-of-year reward of a prepaid card valued at $100 or less would meet their expectations.
* And 55 percent said it would take just a $25 prepaid card to meet their expectations.
“Employees are not expecting rewards this year, but if they received one it would clearly foster positive attitudes and behavior that could help many companies compete in this tough economy,” said Juli Spottiswood, president and CEO of Parago.
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Wall Street and executive bonuses are supposed to reward performance. To encourage a concern for lnger term performance, cash bonuses should be capped at %500K. The rest should be used to buy empolyer stock and held in trust for 5 years. The stock can be handed out over years 5 to 10.m If the performance was worth the bonus, the stock will be worth as much or more. If not, the the stock will be worth less because the performance was not as good as it was supposed to be.
This is terrible news!
How will we be able to retain the very best executives on Wall Street if their bonuses are reduced? Now they will be forced to take their talents elsewhere. God help us all!!
Excellent idea Azindy. Can we also do the same thing with Union workers? Think of how much tax money will be saved if teachers, firefighters, police officers et al can't retire at 90% pay after 20 years... multiple times... imagine if they could actually be fired for not doing their jobs instead of being moved into "administrative positions".
If we're going to go to a results system, let's go all the way!
Good ideas. How about adding that if their firm loses money, there should be no bonuses, period. It was especially disgusting that bonuses were issued to firms that took bailout money. What a joke. Our astute legislators sure missed that one.
Oh, Andrew...the only folks missing anything in all this are the taxpayer sheep being fleeced....the legislators didn't miss a thing.
I would bet a $5 prepaid VISA card that those whose bonuses are "plummeting" are those maybe halfway up the ladder and below.
Agreed.
The only people taking cuts are those on the floor doing the actual trading and helping the public, while those up on the 52nd floor sipping 50 year old scotch at 9 am have nothing to fear.
QUESTION ??
Wasn't it their performance that got us into this mess in the first place ?????? My bad Forgot . Running a company or country into bankruptsee is good and sound pratice , there for should be rewarded handsomely !!! I'am sorry about that , I am just old school and don't understand modern banking.
bob
Bob: It's really sad to see how far you've strayed from the smart, reasonable approach. Why don't you just give all your money to Jon Corzine to watchover....he understands how all this stuff works. It's a little too taxing for the likes of you and me.....
deregulation and a crooked SEC did unfathomable damage to 99% of this country so does it matter at this point who gets kickbacks/ birddogs as are homes and 401k's value's dwindle to zip.....Hmmmmmmmm.
I feel for our youth coming into this mess, trying to find a decent job while being saddled with 10,000's of school debt while the 52nd floor banker crooks wonder what color BMW they need next year before vacationing in Kiwi
My heart bleads for the poor, unfortunate securities traders who won't get a nice bonus this year. KMA!
Do we look stupid? They will give them their bonus, I will bet my a$$ on it! Fannie Mae and Freddie gave a bonus lmao. You see they reward failures, they bet big on the housing losses, and made millions. They we're suppose to fail.
Bummer...
HahahahahahahahaHAHAHAHAhahahaha...
AHEM!
Bummer...
I would sincerely hope that, since these folks can't fix the economy either, they would lose all bonus money entirely and have to get second jobs. You want fries with that?
So what are the big corporations going to do with all of those profits?
Oh, my--what are we going to do for "job producers" now?
Notice that the article specified "employees" and not exec "officers"?
Uh, Mark? I hadn't been aware that any of those union members could wipe out your life savings with a single transaction, nor destroy the economy on a whim. A single million dollar bonus will cover an awful lot of "90%" pensions.
Or don't you believe there should be penalties for gambling with other peoples' money in unethical fashion ........... and losing?
Eat cake, banker bitches.
I've never been against the Wall Street bonus system and believe that although it has been misused and become a mammoth payout system, it is still a practice that should not be interfered with by legislation. However, we have not put enough emphasis on why this is done for retention of valued employees. To make this practice a fair and legitimate way of doing business, it should have some liabilities if those "profits and gains" were gained unfairly or deceitfully and used as "bonus payments". All liability exclusions should be removed and those that hide behind CORPORATE liability shields should be held accountable and punished as individuals. We cannot allow this theft by those that have "personal liability shields". White collar crime should become "capital offenses" and punishable by mandatory lengthy sentences with no caveats for good behavior. Removing liability shields should be demanded by all all Americans and we can reclaim fairness to the public. We see minor charges by common Americans requiring many years in incarceration, yet Wall Street thieves rarely get any time behind bars and they NEVER have their assets taken away always invoking CORPORATE liability shields.
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Based on their performance before and after the crash they should be hanged rather than hung onto. If that sounds like class warfare it is ok with me. Call it whatever you want to.
RON
I agree with you . But we just do not understand their way of thinking . The worse you do the larger bonus you get . Don't make sense to me eithor. Must be that new math stuff.
bob
I am 100% with you. Hang them all from the nearest tree.
Where I live, they didn't increase the rent last year, because of the downturn. So this year, they just doubled what the raise was. I wonder if this will translate the same way on Wall Street?
My grandfather had a word for these people mentioned in the article. Although it's not repeatable in public at most times, (however, since it is a quote), let me reiterate it for you, "Sonsabitches."
These Wall St. executives should not only not be given bonuses, but they should be fired. After all, the only reason they're still employed is because the federal government stole trillions in taxpayer money to keep them in business.
Not only fired, but transferred to California....San Quentin, California.
Not San Quentin, send them to Marion Ill. it's colder. Let them pay their own heat from last year's mega bonus'.
It's about d*** time!
Each and every bonus dollar should be accompanied by a sharp slap on the bottom or rap in the teeth.
It's not just the Wall Street bastards, it's all of large corporate America. Where else can you run a business into the ground, lay off thousands of loyal employees and piss off all your customers and still get the golden parachute of your dreams. Boards of directors should likewise be held financially liable for their hiring of management morons.
Wall Street and the fund managers are the root of the whole problem. These idiots can't invest in a solid company making a profit. The greedy bastards require that profit to be growing and the rate of that growth increasing. Properly managed small business don't stand a chance for any mind share or consideration from the street while all the clowns who downsize and outsource are heroes and get the big bucks.
Well Boohoo for them.
I remember working for the now closed and defunct Borders. We worked our asses off for a pittance.
During the holidays, the corporate would send us a box of oranges and a box of apples, to share. When it came time for a pay raise, they usually amounted to a nickel more an hour, and only if you were good, really good. What an insult! Good riddance to them and their corporate vultures!!!!
The Game is Rigged.