Honey, They Shrunk My Bonus

huntersburg: about 14 months ago

Brooks2, what's the criteria for switching between Brooks2, caonima, and Al_Assad?

huntersburg: about 14 months ago

And you?

Brooks2: about 14 months ago

you used to be funny, now you are becoming a bore.

huntersburg: about 14 months ago

>do you know how many companies in the SP 500 are less than $400K mkt cap?

None.
FLMAOZ.

>Oh, that's right Stocks are up.... Is that the next pitch I will hear from RE brokers...

Could have fooled us. None of us thought you were in the market, let alone in contact with brokers about buying.

Brooks2: about 14 months ago

sorry. there is...

Brooks2: about 14 months ago

Oh, that's right Stocks are up.... Is that the next pitch I will hear from RE brokers... I have to admit, "you can borrow from your 401k" was one of the bet lines I heard from a RE broker. But, theirs another thread dedicated to irresponsible remarks from nincompoop RE brokers.
here: http://streeteasy.com/nyc/talk/discussion/30149-not-illegal-for-brokers-to-say-things-like-this

w67thstreet: about 14 months ago

hilarious... yes Dow 13K "wealth" effect will overcome the loss of bonus and jobs.... do you even know how big the debt mkt for mortgages are in comparison to the entire equity markets?

Let's just take a 200K sq ft commercial building in NYC... at its peak it would have commanded $2K sq ft. or $400MM... do you know how many companies in the SP 500 are less than $400K mkt cap?

FLMOAzzzzzzz

huntersburg: about 14 months ago

columbiacounty
1 minute ago
ignore this person
report abuse
>ie. please, please, please.
please, please, please.

Must be very familiar to you.

columbiacounty: about 14 months ago

ie. please, please, please.

please, please, please.

300_mercer: about 14 months ago

brooks2, for real estate prices, only time will tell. 2012 April SE index will be the first look. If the stock market continues to be at these levels, we may start to see increases very soon.

w67thstreet: about 14 months ago

ANYONE with a $400K+ base has a huge bullseye on their backs if the equity/debt mkts do not perform..... (w67 guarantee equity/debt transactions volume will continue to go down).... June 30th, another round of cuts, another bf X-mas 2012...

Let's see ppl squawk about their bonuses when their desk is 1/3 of 2012 head count......

Bye Bye...

$500psf... ala Lawrence Yun, I may adjust to $400psf......

huntersburg: about 14 months ago

colunbiacounty calling some else desperate? On what basis - the big car?

columbiacounty: about 14 months ago

don't mess with poor mercer. he desperately needs to finally convince himself.

Brooks2: about 14 months ago

Bottom line.... Incomes continue to go down. 300 Mercer seems to be implying that this should have not effect on RE prices because "they" can still afford to purchase an apartment at inflated prices because bonus's are not down as much... I find this a ridiculous argument. Incomes are directly related to RE prices. Income go up, RE goes up, Income goes down RE goes down.. Especially when financing standards have become so much more stringent in the past 4 years and have not loosened up. With financing so difficult It may still be very difficult for RE prices to go up even with increases in income.. That is the bottom line folks!

huntersburg: about 14 months ago

>Let me ask you this: before that nominal $300K employee took a drop, what pace was he/she increasing at over the previous years to get to that point?

You can't disagree with DiNapoli's hard data even though you've stated here your "data" entirely to the contrary, so now you have to present an entirely new and novel argument that will lack any actual data proving it or refuting it. Then, in the absence of evidence to the contrary, that would make you correct this time, right?

Reminds me about 10 years ago I was serving on a jury (yes I'm one of those people, like Larry Ellison, who can't get out of it) and the prosecution brought in NYPD detectives to testify about how the absence of fingerprints doesn't mean that the defendant didn't do it. That trial was such a waste of time, the defense called no witnesses and we acquitted with less than a day's deliberation. Still, the court officers had their gun holsters unbuttoned in case we voted guilty and things got out of hand. FLMAOZ.

huntersburg: about 14 months ago

>In many industries, a 5% annual bump is pretty standard for a bread-and-butter employee.

Really?

inonada: about 14 months ago

"We have to realize that financial services industry is far bigger than just the top banks and they are many people who make 300K all in with more than 10 years of experience whose total comp has not gone down as much."

I think that is exactly where the disconnect is coming from. You're looking at some guy making $350K in 2006 who now makes $300K, and you declare "all is fine" because it's "only" down 15%. What you are forgetting is that the increases for this person (to offset the ones leaving) were missing. Think of it as Wall Street comp's own version of inflation where flat is actually down.

In many industries, a 5% annual bump is pretty standard for a bread-and-butter employee. In banking, it has been more like 10% because of whatever (shorter careers, etc.). So that bread-and-butter employee was thinking he'd be rising from $350K to $550K but is instead looking at $300K. The superstar employees are on 25+% annual bumps, so story is the same there only with increasing numbers. How else do you get to GS partners with average tenures of 20 years at the firm making $8M?

Let me ask you this: before that nominal $300K employee took a drop, what pace was he/she increasing at over the previous years to get to that point?

Brooks2: about 14 months ago

"do they want to purchase it?"

Brooks2: about 14 months ago

First, "if" becomes a big word in this context even though it is only 2 letters. The question becomes, "if" they can afford it("if they have a spouse that makes $150k), "Do they want purchase it". 14% cut in comp since 11' . After Incomes in general down 10% in 10'(according the census) .etc (and I agree with INO-- most are getting a lot worse in bonuses) why would any one want to tie all there money up in a depreciating asset that is still deflating form a massive RE bubble.. I am betting the answer for most is another big 2 letter word,"NO". And, from my informal poles of talking to people about buying in Manhattan, the results are "Hell NO" not now, prices still have a lot more room to go down.

Good luck

inonada: about 14 months ago

You can also click on the link to the chart in the bottom. It shows bonus down from $34.3M in 2006 to $19.7M in 2011, $191K to $121K per head. Around a 40% drop, in line with GS's peak-to-current. Granted, that number does not account for higher base, but that offsets with the delayed payouts from past years.

inonada: about 14 months ago

I have no barometer other than the news reports and maybe a couple of people I know in banking, and all seem worse than 14%.

From DiNapoli's own press release:

http://www.osc.state.ny.us/press/video_press_releases/feb12/wallstreet_01.htm

"While a number of large firms announced reductions in cash bonuses for 2011 (with several firms reporting reductions in the range of 20 to 30 percent), personal income tax collections indicate a smaller decline in the overall cash bonus pool. This is likely due to the payment of bonuses that had been deferred from earlier years. "

300_mercer: about 14 months ago

hburg, Thanks. I was just going to post this. We have to realize that financial services industry is far bigger than just the top banks and they are many people who make 300K all in with more than 10 years of experience whose total comp has not gone down as much. If these people have spouses, who make $150K or so, they can afford a basic 2 bedroom $1.3-1.5mm in New York.

Nada, what is your take on the numbers by Dinapoli. Frankly, they seem better than I thought.

huntersburg: about 14 months ago

inonada
7 days ago
ignore this person
report abuse
>Why 20%? I thought 30% was the number most commonly being thrown around.

Brooks2
6 days ago
ignore this person
report abuse
>30-40% down.

"State Controller Thomas DiNapoli, in his annual estimate, said cash bonuses paid to securities industry workers dropped 14% from 2010 as Wall Street’s economic recovery lost steam in the last half of 2011."

huntersburg: about 14 months ago

check out where columbiacounty calls inonada an idiot:
http://streeteasy.com/nyc/talk/discussion/30081-what-cost-more-feeding-the-car-or-the-family

Al_Assad: about 15 months ago

What's the difference between a bonus and a p*nis? After 20 years of marriage, your wife will still blow your bonus.

huntersburg: about 15 months ago

>w67thstreet
about 2 hours ago
ignore this person
report abuse
>My bud from Deutsche

I thought you don't like bankers since you got passed over for promotion, despite being a TA in business school.

inonada: about 15 months ago

I gotta imagine the more junior bankers are looking at their comp down 10-20% and declaring it ain't all that bad, not like the 40% down seen by the senior bankers. What they're missing is that in the pyramid of banking comp, they should have been getting a bump of 10-20% in a normal year instead of a drop.

w67thstreet: about 15 months ago

My bud from Deutsche just confirmed down 40% from last year. Senior senior mgmt is warning of further cuts. Apparently the big base ploy was ill advised, as head count reductions make ppl not sqawk as much as the work load gets heavier per person wise.

Won't be long before new hires lower base makes some of the old timers huge base look totally outta whack. IMHO. I'd rather have a lower base to ride out this shit storm undetected and un fired. Good luck trying to replace the $500k base salary as a 45 yo with 3 kids about to hit college. Seen it happen. Not pleasant to see a old time banker begging junior bankers for job leads.

inonada: about 15 months ago

Here's one guy's opinion about what 2012 holds:

http://www.ft.com/cms/s/0/3411936a-5e44-11e1-85f6-00144feabdc0.html#ixzz1nPac1FLD

“Investment banking compensation has come down significantly, but it’s likely to come down again next year,” says Tom Gosling, a partner at PwC in London. “As capital requirements put more pressure on ROE, banks can’t just rely on revenue recovery – with compensation being such a significant cost for banks, it is going to have to play its part in bridging the gap.”

The Financial Times has calculated that to achieve a 10 per cent ROE, Goldman, Morgan Stanley, UBS, Credit Suisse and RBS would have to find an additional £7.5bn worth of revenue gains or cost cuts between them.

That would mean setting aside a significantly lower proportion of revenues for pay. Again, to achieve a 10 per cent ROE, those five banks would have to bring their remuneration ratios to between 25 and 35 per cent, down significantly from the 40 to 60 per cent range seen in 2011.

300_mercer: about 15 months ago

kiss, BB article is mixing apples and oranges. Some percentages are bonuses others are total comp. nada, 30% number is generally related to bonuses not total comp including deferred stock.

KISS: about 15 months ago

There is a table showing bonus cut percentages by bank here:

http://www.bloomberg.com/news/2012-02-21/societe-generale-joins-bnp-paribas-in-cascade-of-compensation-cuts-table.html

Brooks2: about 15 months ago

30-40% down.

inonada: about 15 months ago

Why 20%? I thought 30% was the number most commonly being thrown around.

300_mercer: about 15 months ago

Check out this report. Overall industry wage drop not so bad. Figure 5. 2011 numbers are not in yet. 2010 numbers from what I tell tell include bonuses paid in early 2011. Assuming total average comp including deferred stock was down 20% for 2011 of $360K at $290k, still at 2005 levels, which was considered a good year. Reduced cash obviously is painful.

http://www.osc.state.ny.us/osdc/rpt12-2012.pdf

somewhereelse: about 15 months ago

> So by those numbers, comp is down from $528K circa 2006 to $312K circa 2011 for GS non-partners, a 40% drop.

In real terms, I think we're talking less than half...

inonada: about 15 months ago

If you take out the 3K India employees and the $0.3B comp at $100K a head (they've got managing directors too), you're left with $10B and 30K employees. Nudges non-partner, non-Indian pay up to $333K. Still 37% below 2006's $528K.

inonada: about 15 months ago

300_mercer, those words are well and fine, but I don't see how the numbers add up.

In 2006, GS total comp paid was $16.5B with about $2.5B going to partners averaging $8.6M (http://dealbook.nytimes.com/2007/02/13/for-goldmans-highest-echelon-a-salary-to-match/). That left $14B for the 26K non-partners, or $528K on average.

For 2011, total comp is $12.2B for 33.4K employees. The 400 partners are down to "just" ~$4.75M a head (http://online.wsj.com/article/SB10001424052970204331304577147750253122844.html), so $1.9B total. That leaves $10.3B for 33K non-partners, so a "mere" $312K a head.

So by those numbers, comp is down from $528K circa 2006 to $312K circa 2011 for GS non-partners, a 40% drop.

Brooks2: about 15 months ago

I'll put it this way. I never owned RE in manhattan.

huntersburg: about 15 months ago

Lived what? A comp bubble or a real estate bubble or both or what?

Brooks2: about 15 months ago

I lived it