Memo to Wall Street: When it comes to bonuses, flat is the new up.
At least that’s according to the Options Group, a New York search and consulting firm that polled about 1,500 workers at banks, boutiques, hedge funds, and buyout shops as part of its annual compensation survey.
Options Group estimates that this year’s cash bonuses will be on par with 2006 levels, depressed by higher base salaries, lower market volumes, and increased stock-award programs.
Muted pay will be the theme not only in troubled areas, like structured credit and proprietary trading at banks, but also in some of this year’s most active areas, including junk bonds, currencies, and emerging markets.
Perhaps surprisingly, though, some boom-era phenomena—including pay guarantees and a bevy of counter-offers to prized workers threatening to leave their current employers—have also returned, according to Options Group’s summary report, dated October. 20.
“The frequency of counter-offers and the magnitude of the salary increases from these offers have been unprecedented,” says the report. Counter-offers, it adds, “ranged from 50 to 100 percent increases on total compensation.” According to Options Group co-founder Michael Karp, that’s because luring top performers still requires heavy artillery.
Despite all the gloom, a few corners of Wall Street may see higher pay, according to the report. They include electronic trading, information technology departments, and some hedge funds.
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