Monday, January 25, 2010

Bonus 2009

There's been a lot in the media about banker compensation (base salaries and bonuses):

Bank of America
Bank of America CEO Brian Moynihan has confirmed that investment banker bonuses will be made up of a higher percentage of stock this time around. The bank is expected to cut the cash component of bonuses to between 5 - 25%, depending on the amount of the payout.
The bank has previously indicated that, although the this year's overall bonus pot would be lower than 2008's (comparable figures are difficult to extract due to the Merrill Lynch acquisition and headcount reductions throughout 2009), there were likely to be record payouts for certain key performers.
Staff above VP level are said to have had substantial salary increases last year, with some Managing Directors seeing base pay increased by 100%.

Barclays / Barclays Capital
The Financial Times has reported that the bank's top 11 executives are likely to have 100% of their 2009 bonuses deferred for up to 3 years. The next 2,000 most senior bankers are likely to have 75% of bonuses deferred, with more junior staff receiving 50% in cash, with the remainder in deferred equity.
Senior bankers at Barclays Capital are said to have had their base salaries increased by up to 150%. The salary increases were also backdated 6 months.

Citi
The firm has cut its 2009 staff compensation by 20% to $24.98bn (although staff numbers shrank by some 18% throughout the year). Cash bonuses are thought likely to be limited to $100,000, with any remainder being paid in deferred stock.
Base pay is said to have increased for all investment bank VPs and above last year, with some Managing Directors having their salaries increased by over 100%.

Credit Suisse
The firm is said to have told 400 UK-based Managing Directors that their bonuses have been cut by 30% to take into account the bank bonus tax, and the bank's total investment banking bonus pool is thought to have been cut by 5%.
Credit Suisse has increased the salaries of 7,000 of its most senior staff.

Deutsche Bank
The bank is said to be looking to increase base salaries by as much as 30%, as it moves to change its salary / bonus compensation mix.

Goldman Sachs
Goldman took $519m out of its compensation pot when it reported fourth-quarter earnings last week, donating $500m to charitable causes. Total compensation paid to employees in 2009 came in at $16.2bn, and represented 35.8% of revenues - the lowest level since the firm went public in 1999.
The 'average' Goldman employee is to receive $498,246 for his (or her) toils last year. And The Times has reported that the firm has capped the pay of its 100 London-based Managing Director Partners' compensation to a maximum of $1.6m each, in view of the UK bonus tax and the political climate.

HSBC
The bank has said that 'no decisions' have yet been made about the size of the bonus pool.

JPMorgan
The firm has set aside $9.3bn in compensation at the investment bank, which represents 33% of division revenues (down from 62% in 2008). The 'average' investment banking employee will receive some $378,600.

Morgan Stanley
2009 compensation came in at $14.4bn, with the 'average' employee making $235,000. The firm, however, has allocated a massive 62% of last year's revenues to staff pay - it's highest ratio for over a decade.
Bloomberg has reported that CEO James Gorman has been awarded $8.6m in deferred stock grants for his work last year. Chairman John Mack (who was CEO throughout 2009) just took his $800,000 base salary.
Base pay is said to have been increased for many, with Managing Directors seeing increases of up to 125%.

Royal Bank of Scotland
The UK government majority-owned bank has yet to firm up the exact amount it is to pay out in 2009 bonuses, but the the total is unlikely to exceed $2.4bn. City Minister Lord Myners said earlier this month, however, that he recognised that 'arbitary' payouts would cause a 'significant erosion in the competitiveness of the bank', as disenchanted bankers will leave to ply their trade elsewhere.
UK lawmakers, however, have expressed some concern that former ABN AMRO investment bankers (now at RBS) might be getting bigger bonus payouts in 2009 than they bagged while working at the Dutch firm.

Standard Chartered
The bank has so far refused to disclose the size of its bonus pool.

UBS
Swiss regulators are said to have insisted that UBS cuts its bonus pool by 25% to around $2.93bn.
The bank is said to have increased base salaries for senior investment banking staff by an average of 50% last year, with Managing Directors seeing increases of up to 125%.

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