Wall St bonuses to separate haves and have-lots

But looking at the full range of commercial banks and European banks -- including Merrill Lynch, UBS, Citigroup, and Bank of America -- bonus payouts could fall as much as 10 percent.

BALANCING ACT

Banks hit by the credit crunch will be eager to cap expenses without driving away bankers by paying relatively paltry bonuses.

It's the traditional balancing act made even trickier by the fact that Bear Stearns, Merrill and Citigroup, where revenue is under pressure, announce their bonus payments after the untarnished Goldman.

"I don't see how any platform can maneuver to approach what Goldman will do on bonuses this year," said Stephen Spagnuolo of Sheffield Haworth. "Goldman is the outlier."

Rivals will have to make the effort. Newly hired Merrill CEO John Thain has said he expected to pay out nearly 60 percent of revenue as compensation to ensure that Merrill's best people stick around as the firm tries to turn its business around.

A fashionable solution this year is offering an unusually high mix of stock as compensation, up to more than 70 percent, compared with the more typical 50-50 split. That defers costs and can help retain star staffers.

UBS, for one, will cap cash bonuses at $750,000 this year. It announced a $3.6 billion hit to third quarter results from subprime write-downs. Analysts expect additional fourth-quarter losses.

To be sure, some recruiters expect credit woes will take a bigger bite out of bonuses. Options Group's Moskowitz says that bankers will be pleased even if bonuses drop 5 to 10 percent.

"That's pretty darn good -- 2006 was a record, so you're pretty happy," Moskowitz said.

(Editing by Brian Moss)