Interesting article today saying that because a lot of base pays were increased after the crisis to quell criticism that the finance pay structure encourages risk, some banker's won't be getting bonuses.
Any ideas on what sort of people this will affect? The article seems to say that some MD's whose base jumped from 200k to 400k (MS and CS did this), won't be getting a bonus. Does that make any sense? Can any of these banks really get away with paying an MD 400k? Or does this mostly apply to BO and MO as the article sort of implies.
More philosophically, does this mark the beginning of the trend away from large incentive based compensation?
Personally, I think that Wall St. needs to sack up and ignore the criticism - compensate according to what works for them and don't take into account what outsiders complain about.
Is it even possible to live off 400k?
this comment made my day.
too funny
Too many doommongers around. Give it a few years and everyone will have forgotten about Wall St and things will be back to normal.
given that I'm risk averse, I'd be happier with a higher base as long as total comp isn't too low relative to before
Isn't seppuku better than a zero?
They didn't say MDs at MS who's base rose to 400 from 200 would possibly get zero bonus. They said in response to increased scrutiny of bonuses, many banks have significantly upped base salaries.
I would rather get a higher base and less bonus assuming the total comp was about even.
I would in IBD, not in trading. In IBD it's more out of your control than in trading. You can still make great returns trading a down market; hard to do that in IBD, so having a more stable income in IBD would be preferable to hedge against this risk. Meanwhile in trading, if you really kick ass, it would suck to not be compensated for it.
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