WSJ: Bankers' Pay Takes a Tumble

http://online.wsj.com/article/SB10001424052748703856704576285450222313000.html?mod=WSJ_hps_sections_management

"Top bank officials across the Street report the number of $5 million earners has fallen significantly since the crisis"

I'm also going to assume that the medians don't include non-bankers... as well as analysts, maybe even associates. They can be half the banking staff and would pull those medians down more".

We know the average pay at all the first as they give you the number of i-bank employees as DB, JPM etc versus comp (I-bank only). Average is in the $200k-$400k per, all in.

The article indicates it's averages for mid-career bankers, so it excludes a bunch of people but is still interesting data despite this fact.

The average so far based on CY1Q2011 comp accruals and # of employees is down 5-10% YOY for the average employee.

"The article indicates it's averages for mid-career bankers, so it excludes a bunch of people but is still interesting data despite this fact."

Yeah, you are right, I missed that part, see it now.

Agreed, it is still interesting...in fact, probably more interesting than if entry level numbers were included (which would skew the thing down).... assuming that they are going by common sample groups.

I'm not sure what this article is saying. Some bankers are very much in demand, others not so.
Yes compensation is less cash, but that's not necessarily the same as "less"

Not sure how Wall Street can pay huge cash bonuses when they are still on Fed Life Support rebuilding their bank balance sheet.

I wouldn't put too much stock in this article. First of all, the WSJ has taken a dive in the "making sense" category for a while now. Second, the banks have much PR riding on making themselves look like small, teeny-tiny, mewling kittens (lest the populace overtake their paid-for politicians.) Finally, looking at the article, the numbers seem of the GIGO variety: who is a banker? Is the same definition applied across the line? are they comparing apples-to-apples? I suspect the numbers are made out the way they were convenient for the purpose of the story they needed to put out.

No, RS, it says TOTAL comp is down 27%, and in ADDITION to this the cash component is down. They give numbers and everything.

Bankers are not homogenous. Some bankers will clearly not be doing well. But in selected M&A categories they're doing quite well. BMW & Mercedes are gearing up their show room to tap into some of the dough.

Of course median just indicates 50th percentile..

What about hedge fund managers?
Are Happyrenter and Steve Rattner still getting their own special tax benefit that enables them to call for everyone else's taxes to go up?

Well Citi just announced plans to beef up and hire more bankers & traders (500+)

Where will those 500 traders be located? Not all in manhattan, dumnmy. Meanwhile:

"The Financial Times reports that Barclays is to shed 'several hundred' UK corporate banking jobs as it moves to restructure its global operations." See http://news.hereisthecity.com/2011/04/26/top-firm-said-to-looking-to-axe-several-hundred-staff/

See also "The Financial Times reports that HSBC looks set for a 'radical shake-up' which will result in 'slashing costs and reallocating capital in an effort to boost profitability and also resuscitate its flagging US operation'." at http://news.hereisthecity.com/2011/04/21/top-firm-said-to-plan-radical-cost-slashing-shake-up/

In other words, anecdotes are meaningless. I gave you meta-data. Even if "select M&A areas" are growing, overall compensation and overall compensation per employee are not.

I'm sorry, but what exactly makes Riversider a dumnmy for his statement based on wherever the traders might be located?

>In other words, anecdotes are meaningless

Exactly in what instance has an anecdote been meaningless?

i do think it's important to remember that both the journal and the banks themselves benefit from making compensation numbers at the banks seem smaller. one thing that might be going on: the growth of "deferred compensation in the form of company stock" allows the banks greater leeway to set their own values on compensation. all you have to do is open your eyes to see that the banks have roared back, largely because the federal government has punted on reigning them in.

Can we just clarify one thing?!
Its down from 2.2 Million to 1.6 Million!
The moral is go into banking! dont do anything meaninful, go into banking!
It is not that hard, and you get to rape the rest of the country.
Every body wins!
Hurray for wallstreet, they win again, even with their paycuts.

We don't even know that average compensation is down for sure. I have a feeling it depends on what the definition of "is" is.

Over 50% of these guys wouldn't have a job if it weren't for TARP and Fed policies babying the banks.

But of course all of the believe the opposite - that they "deserve" it and "earned" it - and go out and buy $3M 2 bedrooms on the UES.

If you make stupid money why not make stupid purchases?

It's somewhat hilarious that the original article proposes that it's not enough money and people may leave as a result.

Leave to do what? In what other profession is a mid career salary anywhere near $1.6 million? Unless they also happen to be ridiculously good athletes and can go back and accept their NBA draft position or something, I'd say the prospects look pretty bleak.

no shlt--while on the street i used to laugh at morons who bitched continually about being underbonussed etc--those that got "fed up" and left nearly always went on to fail in other businesses, and come crawling back, often unable to get back in

amazing how $$ can breed entitlement and a sense of accomplishment where little has been accomplished

Which is why I am a pro-tax-the rich democrat, who will see my own taxes go up under Obama's plan.

i am the same--most amazing to me are the licDopes of the world, who buy that murdochcracy benefits them

they are seriously high on koch--

Wbuttocks!

> Which is why I am a pro-tax-the rich democrat,

Why group the rich who actually created something with these morons?

Raising everyone's taxes isn't the answer... I think the banks should pay a larger burden of their true cost in terms of oversight, insurance, etc.

tax and "regulatory" treatment of the banks had been a farce, and we have all paid their very expensive indirect cost--clearly this should chsnge

tough, tho, when gop, at behest of bank-bribe-pimping lobbyists, seeks to trash in the ugliest of way the excellent elizabeth warren and others who wont tow their line, like sheila bair, broksley born---wait, these are all women???

woops "has" been

and rich like me should be taxed more!!

I think there is more deferred compensation.

There was a story on bloomberg a couple weeks ago about lots of traders moving around from ibank to ibank b/c more firms are putting more of the compensation into deferred structures that cannot be cashed out for years...and mandatory deferred periods are getting longer.

Thought will add some color to what the article means by mid-level bankers. The article really means mid-level MD's in revenue generating function, specifically client relationship bankers. A majority of people (95%; strip out tech, support and control, and most non-MD revenue generators) do not make any think close to this money.

Sorry Typo.
Thought will add some color to what the article means by mid-level bankers. The article really means mid-level MD's in revenue generating function, specifically client relationship bankers. A majority of people (95%; strip out tech, support and control, and most non-MD revenue generators) do not make any THING close to this money.