* Wall St bonuses to decline 20-30 percent in 2011-report
* Traders, top executives to see biggest pay cuts
* Bonuses curtailed amid layoffs, weak revenue outlook
By Lauren Tara LaCapra
Nov 8 The average Wall Street bonus will
decline by 20 percent to 30 percent this year, according to a
closely watched compensation report, as banks cut costs and lay
off workers in a weak environment for trading and deal-making.
Employees in the bond-trading business will face the
sharpest pay cuts, with bonuses down 35 percent to 45 percent
from a year earlier, according to a projection by New York
compensation consulting firm Johnson Associates.
Equity traders and senior executives will also have their
bonuses cut by up to 30 percent, the firm said. Investment
banker bonuses will decline up to 20 percent.
"The lack of economic recovery, combined with ongoing
uncertainty in the world markets, and global and regional
regulation are driving most financial services firms to
significantly reduce the size of their bonus pools," said Alan
Johnson, managing director of Johnson Associates. "As a result,
most, but not all, professionals will receive smaller payouts
Traders, bankers and top executives typically receive base
salaries of $100,000 to $1 million, but most of their
compensation comes as bonuses after year-end, based on the
performance of the individual and the broader company.
The expected decline for 2011 comes after two years of
record payouts for Wall Street workers, as markets staged a
rebound from the depths of the financial crisis. This year,
though, big trading and investment banking houses have been
reporting increasingly bleak earnings and have begun laying off
thousands of employees.
Last month, Goldman Sachs Group Inc reported the
second quarterly loss in its history as a public company, while
Morgan Stanley and the investment bank of JPMorgan Chase
& Co posted sharp declines in third-quarter operating
earnings before an unusual accounting gain.
In the first nine months of this year, Goldman, Morgan
Stanley and JPMorgan's investment bank set aside $30.4 billion
for compensation and benefits, down 7.8 percent from a year
The Johnson Associates report suggests that pay will come
down by a much greater percentage. The only two business lines
in the financial industry that may see slightly higher pay are
retail banking and divisions that deal with high net worth
customers, the analysis said.