Wall Street Bonuses up Whopping 60% From Last Year
November 9, 2009
(ChattahBox)—Wall Street bonus payouts of the three big financial firms, Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank are poised to hand out the biggest payday yet of $29.7 billion in bonus compensation. That amount is a whopping 60 percent increase from last year’s bonus awards.
Despite nearly failing during the economic collapse last year, requiring billions of federal funds to shore up the financial giants, Wall Street executives have returned to their former risky compensation practices.
The nearly $30 billion in bonus payments for the big three firms, that have since paid back federal TARP funds, will go into the pockets of 119,000 employees, at about $250,400 each. According to Bloomberg, that amount is nearly five times the $50,303 median household income in the U.S.
A report released by the Options Group, a New York-based executive search and compensation consultant firm, offers a detailed look at bonus compensation this year. According to the report, bonuses for employees at financial firms worldwide will rise about 35 percent to 40 percent.
Executives working in high-yield credit sales and commodity sales units can expect to receive the largest increase in bonus payments from last year, at a 50 percent jump. For example bonus payments made to managing directors will increase from $1.3 million to $1.7 million this year.
Michael Karp, co-founder of Options Group doesn’t expect Wall Street to take away many lessons from the economic collapse and risky hedge fund investments. “Wall Street is all about creating wealth, and when banks start making money again, they have to pay their people,” said Karp.
According to a recent survey of Wall Street executives, more than a third of Wall Street professionals expect a bonus increase in 2009.