- 'Cancer of Fraud' Permeates Health Care System: Critics
- For Many in US, It Will Be a Scaled-Down Holiday Season
- Judge Erases Couple's $525,000 Mortgage Payment
- Where Do Pardoned Turkeys Go?
- Foreign Demand Boosts US 7-Year Treasury Sale
- Google CEO Schmidt Makes Secret Visit to Iraq
- New-Home Sales Jump to Highest Level in Over a Year
- Consumers Catching the Holiday Spirit
- Jobless Claims Below 500,000, Durable Orders Slip
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- S&P Stocks Trading at New 52-Week Highs
- 4 Food Stocks to Stuff in Your Portfolio: Analyst
- S&P at 1050-1200 Trading Range Next Year: Strategist
- Treasury On Mortgage Modifications
MOST SHARED
- Ritz-Carlton ?Struggling? in the US: President
- Garlic Price Rises Surpass Gold, Stocks in China
- S&P Stocks Trading at New 52-Week Highs
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- Oil Price to Average $75.40 in 2010: Poll
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Jobless Claims Below 500,000, Durable Orders Slip
- Consumer Mood Improves, But Anxiety Over Personal Finances
- Judge Erases Couple's $525,000 Mortgage Payment
- Black Friday: Can Banks Tap the Frenzy, Too?
Text Size 
On Wall Street, the rich may get still richer.
Investment bankers may see bonuses and other incentive pay rise 10% to 15% from elevated 2006 levels, while gains may be 15% for traders and 20% or more for workers in private equity, according to a study by Johnson Associates, a prominent compensation consultant.
Financial services are benefiting from growth in international operations, proprietary trading and derivatives, and as low borrowing costs fuel record buyout activity.
"Many firms are building international businesses and seeing more and larger deals there, including in Asia and Europe," said Zanvi Patel, a vice president at New York-based Johnson Associates, in an interview. "Lenders are (also) benefiting from a healthy economy and record highs in some equity indexes."
"Companies have to balance their interest in boosting shareholder returns with a need to pay the producers who generate them."
But not all will benefit equally, the study said. Incentives may rise 10% for workers who serve wealthy clients and 5% to 10% in both asset management and commercial banking, the study said. Retail banking employees may see gains of flat to 5%, as rising mortgage defaults crimp profit.
In 2006, incentive pay rose about 20% in investment banking; 12.5% to 15% in trading; 10% in asset management, commercial banking and high net worth; and 7.5% in retail banking, Johnson Associates said.
Bonuses for securities industry employees were projected last year to have risen 17% to a record $23.9 billion, according to a December estimate by former New York State Comptroller Alan Hevesi.
Incentives can comprise the bulk of compensation for top investment bankers and traders. Their overall pay regularly reaches seven figures and occasionally eight figures.
Several investment banking and trading specialists reported strong first-quarter results. Trading gains helped Goldman Sachs [GS
Loading...
()
] and Morgan Stanley [MS
Loading...
()
] post record profits and helped Citigroup's investment banking and trading unit increase profit 36%.
Merger activity also remains strong, including a roughly $90 billion battle for Dutch bank ABN Amro [ABN
Loading...
()
] and buyouts led by Kohlberg Kravis Roberts planned $31.8 billion takeover of power company TXU [TXU
Loading...
()
].
Goldman in April closed a $20 billion buyout fund, while Blackstone Group, a private equity firm preparing to go public, said it has raised $19.6 billion for its latest fund.
Print
Email
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.
Data is a real-time snapshot *Data is delayed at least 15 minutes