Wall St bankers in line for poor 2012 bonuses
Pay expectations are being driven down on Wall Street, with a fifth of banking employees expected to get no bonus at all this year
Wall Street banks are deflating their employees' pay expectations to avoid a replay of last year when cutbacks on bonuses and increased deferrals surprised bankers and traders.
Almost 20 per cent of employees will not get year-end bonuses, according to Options Group, an executive-search company that advises banks on pay. Those collecting awards may see payouts unchanged from last year or boosted by as much as 10 per cent, compensation consultant Johnson Associates estimates. Decisions are being made as banks cut costs and firms including UBS and Nomura fire investment-bank staff.
Some employees were surprised as companies chopped average 2011 bonuses by as much as 30 per cent and capped how much could be paid in cash. That experience, along with public statements from top executives, low trading volumes in the first half and a dearth of hiring, had employees bracing for another lacklustre year, consultants and recruiters said.
"A lot of senior managers won't have to pay up because they're saying, 'Where are these guys going to go?'" said Michael Karp, chief executive of New York-based Options Group.
"We're in an environment where a lot of people are just happy to have a job. Expectations have been managed so low that people will be happy with what they get."
More modest expectations reflected a new reality as total pay was about half what it was in 2007, Options Group said in a report last month.
