| NEW YORK
NEW YORK Aug 11 Bonuses for Wall Street's
traders and underwriters will surge from 2008 levels, although
they will still be below the windfalls of 2007, compensation
consultant Alan Johnson forecast in a mid-year report.
Johnson forecast a wide range of pay packages across
different financial services firms and among different
businesses. Companies that repaid U.S. Treasury funds from last
fall will have greater flexibility, yet public resentment
towards lavish Wall Street pay may force even the top
performing banks to strike a balance.
"It's going to be a tough year-end. People's expectations
may be ahead of the financial (results)," Johnson told Reuters.
"It's a tough year and you have a difficult political
environment. On the other hand, that beats heading into the
abyss like we were last year."
The average Wall Street bonus will rise roughly 30 percent
from last year, although that is down about a third from the
blowout pay of 2006 and 2007, Johnson said.
The big winners this year will be those in the hottest
parts of the market: fixed income traders, up 40 percent to 50
percent from 2008, and traders of equities and equity-
derivatives, up 20 percent to 30 percent.
Johnson notes that year-to-date Wall Street results are
dominated by debt, currency and commodities trading, which
accounted for about half of overall first half results across
the leading firms. Investment banking generated just 13 percent
of investment bank revenue.
Securities underwriters will see 15 percent to 20 percent
increases, keeping pace with the surge in stock and debt
By contrast, merger advisers on average will see bonuses
cut another 10 percent to 15 percent from 2008 lows, while
prime brokerage payouts will drop by 25 percent to 30 percent.
Asset management, hedge fund and private equity executives
will see bonuses slashed 20 percent to 35 percent, reflecting
lower management fees and the fallen value of their
Senior bank executives, many of which gave up 2008 bonuses
amid a public backlash last year, will see "significant"
increases, Johnson estimates. But officers whose pay is
disclosed in regulatory filings will likely continue to see
Late last month, the New York Attorney General scolded nine
banks that received $125 billion in taxpayer bailout money last
year, yet paid themselves $65 billion in bonuses for 2008.
Meanwhile, a bill seeking executive pay limits and a "say on
pay" vote for shareholders is working its way through
(Reporting by Joseph A. Giannone; editing by Andre Grenon)