Bonuses 2008
Bonus talk is already in full swing for senior levels. Anyone have any feelings on what analyst bonuses are going to be?
I think first year analyst bonus will be 50 - 70, second year 70-90.
(Exclude GS who if it doesn't pay first year analysts this year +$90K should be considered cheap.)
Don't think 50-70 can be accurate at all. Will be interesting how larger variance in financial results of BBs will affect lower level bonuses (analysts, Associates). But I guess 50 or below will be the norm for first year analysts. GS will never pay 90. Why should they? Everyone will stay with a bank performing that well (and it's GS) so what would be the deal for GS paying much more than the others? GS will be 60 or so max.. They are not stupid...
GS never pays high, they have the name. You can be sure BofA will SUCK AS% with 100 MILLION in profits over the whole IBD department.
There's no way top bonuses will drop to 50K. Worst case they'll drop 10 - 15%, but at analyst level really don't expect to see much different than what they were over last couple years.
[from bankersball.com]
The news is not all bad. Two comp firms are out with 2007 bonus projections.
Streetwide, the Options Group is projecting that bonuses will be down 5 - 10%, reports the WSJ. Johnson Associates is projecting no change year over year. (Options Group estimates that bonuses increased 15 - 20% last year and 20% in 2005).
Here are the specifics:
I am talking about average
Never ever will the I-bankers' bonuses be UP by 10%. That means the whole bonus pool would increase by that size. No bank can communicate such a worsening of the comp/revenue ratio to its stockholders...NEVER
Mortgages -30% might be the case but that's only because half of the people got fired anyway so the very small cake is shared by less people which leads to -30%
the bankers ball article is outdated; it was forecasting the 2007 Bonuses at the beginning of a soon-to-be record year of bonuses.
the anticipated lower earnings due to poor late 2007-2008 performance will certainly drop 2008 bonuses, but not too drastically, in my opinion.
Actually the bankersball article came out this morning, Nov 7, and refers to a WSJ article published today as well. To quote the WSJ, "people working in Wall Street firms' hedge-fund units may see slight declines, while investment bankers and those in private equity and venture capital will see bonuses increase 10%." http://online.wsj.com/article/SB119440038201284710.html?mod=hpp_us_what…
IB bonuses up this year? What a joke.
What a joke? A lot of groups within IB (Corporate Finance, as I don't know anything about S&T compT) have had record years, it's going to be tough to pay out lower bonuses to guys contributing so much to the bottom line.
The jury is still out on where bonuses ultimately go - it could be flat year over year.
I have a really hard time buying that it's going to be up across the board though.
Agreed - Although as mentioned above, a drop to 50K is absurd.
Just a quick question to anyone that has the knowledge (and I doubt many, if any will have a legit answer)...
Obviously bonuses for 1st years weren't that great back in 2002 (wasn't it around $30 or so?)... What was their highest level before that? Basically, how much did they fall during the last recession (inflation adjusted if you could think about it...)
I thought bonuses in 2002 were in the $10 - $20 range...
The current pullback for the financials, some could argue, is as great if not greater than what occured in 2002. The BB are down on average about 25% in the last 3 months. Don't forget there is more to come...
The banks are trying to preserve capital now. I can't see them paying such high bonuses. I say they either cut bonuses or dividends. I think the market cares more about dividends.
record years in what part of IBD that will offset that ass-pounding that happened in Leveraged financce, about to happen in M&A and any private equity/advisory. Your restructuring guys are money, but IBD up 10% is probably the dumbest shit I have heard. Company performance is also included in your stub, so don't think b/c the ABS shitheads are kicked out that won't affect you.
Cut the bonus, all the staff leave, stock tanks and the bank gets taken over. Cut the dividend, the stock tanks, bank gets taken over.
Damned if you do...
or just not fuck up like Goldmans or Deutsche...
Beaker, you have no idea what so ever: Where should the staff go? Lateral moves are dead at the moment...
Feel sorry for people in the States. Really sorry.
Spiderman, it was said tongue-in-cheek. It was an over simplification to point out that bonuses have very little to do with results and more to do with managing expectations. Kind of like dividends. Gone are the days when bonuses come directly out of pools and when dividends are signals. Management is too smart for that.
Kind of makes both redundant in a way, doesn't it?
Yeah, as nystateofmind said, you have to think about all the fees that IBD has brought in throughout the entire year - not just in the past months, and NOT just in the leveraged finance group.
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