If there's one thing that gets bankers up in arms this time of year it's the notion of rolling a donut. Imagine working all year long and not being handed an envelope at bonus time. That seems to be the big fear on the Street this year, with upper management at many banks preparing their employees for the worst.
Wall Street bonuses are likely to be down 22% to 28% this year, according to, an executive-search and consulting firm. The drop follows last year's much-criticized surge in banker pay and highlights growing uncertainty on Wall Street ahead of regulatory scrutiny and weak financial markets.
Firms are claiming that lower bonuses this year are offset by increases in base pay over the past two years, but that is mostly at the senior level. Junior bankers' all-in comp is still well below 2007's high-water mark, and base pay is still roughly what it was then - if not somewhat lower. So how do you cope with the idea of lower, or worse - no - bonus this year?
I'm not looking for a bank vs. bank bonus debate, what I'm really curious about is how you guys would feel about doing away with the bonus system altogether. How big an incentive is it for you, really? Would you rather just work for a fixed amount and not have the anxiety every January? What about phasing in bonuses at the, say, 2nd year Associate level and making comp incrementally more dependent upon rainmaking as you rise through the ranks?
In other words, would you still want to be a banking analyst if you knew your total comp figure right off the bat? If you knew that you were going to make $110,000 for the year, no more and no less, would you still do the job? I guess what I'm asking is, how big a motivator is the year end bonus for you?
And what happens if you roll a donut this year?