NYT: Some Wall Street Year-End Bonuses Could Hit Pre-Downturn Highs

Funny, you didn't post the article on how RBS isn't giving a cash bonus for anyone earning over 39,000 pounds since they needed another cash infusion from the government.

there's a link to the WSJ article in here as well. but i have the flu (the whole damn household has the flu), and i'm going to amuse myself wherever possible, and the WSJ is rarely amusing.

http://dealbreaker.com/2009/11/bonuses-are-back-unless-you-wo.php

And in a major reversal from just a few years ago, alternative investment pros will be worse off, not only than their I-banking peers, but even compared to their own sorry bonuses from last year, despite the big returns many hedge funds and private equity firms have enjoyed in 2009.

The Johnson Associates survey predicts that investment bankers will, on average, get a 40% fatter bonus check this year. But before you M&A guys start pricing Maseratis, the news on the Street is not all good. Those bigger bonuses will be going almost exclusively to traders, with bond traders getting between 50% and 60% more than last year, and equity traders getting between 40% and 50% more. Indeed, if the words “fixed-income” or “equity” is not in your title somewhere, you’re probably going to have to make do with less than last year.

Commercial bankers? Expect between 5% and 10% less. M&A advisers? 10% to 15% less. Asset managers, hedge fund guys and buyout kingpins? Cancel Christmas.

You see, all of that stellar performance this year, which may or may not have made up for those catastrophic losses last year Ken Griffin, apparently hasn’t fooled enough investors to give hedge and p.e. funds their money back. And until they do, it seems that those who two years ago were preparing to inherit the earth will just have to watch those I-banking dinosaurs have all the fun.

Well, private equity is definitely not seeing those bonuses. The real story is how lopsided the payouts will be. This was also an important note in the article: "The firm’s study by no means provides a complete view of bonuses. For example, it did not examine specific dollar amounts for individual employees; instead, it looked at the projected increase to the bonus pool for several different financial businesses. In addition, it looked only at year-end bonuses and long-term stock awards, leaving aside large salary increases and option grants that several big banks made earlier this year." Wall St is making a lot of money, that's for sure, but it's fewer people and that money isn't distributed the way it used to be.

And traders, when they see their bonuses risk-adjusted, won't be getting much, either.

Just wait. The more they pay themselves this year, the worse it will be for them in the future. Even the likes of GS only survived b/c the government covered their counterparty risk (AIG), and guaranteed their capital.

They think they deserve huge bonuses? If the government had guaranteed me last year, I'd have a lot more money than I currently do, I can assure you.

Luckily there are some of us who don't have a bonus, and merely take a % of revenue generated. For us, this year has been amazing. Interest rates at zero are a godsend. Equities going up doesn't hurt either.

look, spin this all you want, but bonuses overall are going to be dramatically better than anyone could have anticipated just 6 months ago, and at historically tremendous levels. has every fund crept past its watermark? of course not, but many have, and many others are close enough that one more decent year and they'll be minting money again - something wildly unanticipated back in the spring.

and besides having the obvious impact of more $$ available to spend on real estate, the city's revenue will benefit greatly (obviously still a huge problem, but way better than we could have anticipated).

try, but you just can't spin this as anything but a huge positive for NYC real estate. does it mean all is well - of course not, but things are way better than anyone thought they'd be

What a joke. Tell that to Citi and BOA! Clearly not the case

"look, spin this all you want, but bonuses overall are going to be dramatically better than anyone could have anticipated just 6 months ago"

and dramatically more restricted than anyone could have anticipated just 6 months ago...

Will be tough to buy anything without any cash....

"and besides having the obvious impact of more $$ available to spend on real estate, the city's revenue will benefit greatly"

only if you are oblivious to the actual facts.

Yeah plus all the stock options that executives received in January or February have returned enormously. Like a gift!

Does anyone here actually KNOW a trader? As much as I like to keep things macro, I'd like to hear a real story. I'll know more about my clients and their bonus in the next 90 days. There's more people woring in hedge funds here in the city than in the top firms, so I would imagine my guys will be having banner years.

'some'

A huge part as much as50% of bonuses go to taxes. So it is better that companies part with their profits than keep it on their books.

I do. hopefully Ill be one one day as well. I work on a major cash and derivative market making desk.

All my guys are having great years. You?

If someone goes into Goldman Sachs with an assault rifle....it would be unacceptable, but understandable

was it chris rock? OJ? it's not right, but i understand.

Scargo,

Don't be a jerk. Do I feel bad that I'm having a great year when 17% of the country is unemployed? Kinda, but I'm in this position because I worked my ass off for years. I had a wake up call many years ago when I was laid off from doing what I loved, and it didn't take long for me to understand that I needed to give up some happiness in exchange for security.

Don't fault the rank and file who work in finance because the economy sucks. 99% of us had nothing to do with the meltdown. If anything, your ire should also be directed at the dipshits in real estate who told you it would never go down. When I invest money for a client, I always tell them they can lose money, and that it's a very real possibility their first statement will have a loss. So what? I'm not investing for tomorrow. I'm long term. That's why clients stay with me, and my assets keep growing. How many real estate brokers can say that?

how would things have worked out for you if there hadn't been a bailout?

I'm not revealing my firm, but all last fall did was increase inflows from my clients and bring me new ones. I'm a stockbroker, and don't use leverage. I don't get a bonus, but I have no cap on my income, which is why I chose this job. I can make as much as I want, provided I work my ass off. I don't have a problem with that.

so...if there hadn't been a bailout, you figure that your business would still be great? even if the entire financial system crashed, you'd still be OK?

Yes. I deal mostly in municipal fixed income. As long as the subway doesn't close, I'm going to be OK. If they need funds, they raise the fare. My business is based on a relationship I have with my clients. I don't take stupid risks, like putting someone into a neg am loan. I sleep like a baby.

The system wasn't going to crash. The crap was going to get flushed down the toilet. We all knew that. Some firms are doing great. History is written by the winners.

what a shame that there aren't more princes like you. good luck.

columbiacounty, when are you going to explain why you are ok with some liars, like aboutready, but otherwise you are a miserable SOB.

Who's a liar?

which munis are you clients in that werent deep in the shitter?

Ubottom,

Maybe you misunderstand how munis work. Clients concerned about income don't look at the prices every day. We were BUYING last fall as the spread between munis and treasuries got to a point we'll probably never see again in our lifetime. Nothing defaulted, and nothing I own is going to default. I'm not talking about some crap bond fund that might not get to it's NAV, but individuals.

cool...so you slept well while your client's positions were well in the shitter...and risk of default was considered distinct by the market...you knew better and slept like a baby..wish i was as smart as you

the workings of munis couldn't be more simple, thanks tho for the help

i bought pre-refundeds and vanilla munis myself, but im smart enough to know i was lucky

> 'some'

And some others are 0.

steveF seems to miss that even the rosy projections show about $6 billion less in total bonuses paid... and thats before the stock/deferral factors.

What exactly is "in the shitter" for you? 10%? 20%?

You're overreacting. A single debt payment wasn't missed, and they weren't going to be. Your "distinct" possibility of default theory couldn't be more wrong. The drop in price was forced selling by mutual funds. There were virtually $0 inflows last fall. It was hedge funds deleveraging and small time investors dumping their bond funds to raise cash. Any top trading desk can tell you that. To think people sold because NYC was going bankrupt is to profess ignorance of how things work.

Where do you think the Lehman muni inventory went? Forced selling....