Wall Street bankers facing pay cuts as profits fall

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Pay on Wall Street is falling as fast as big banks' profits and revenues for the first quarter.

Goldman Sachs cut pay 40 percent year over year, the bank revealed on its first-quarter earnings call Tuesday. Compensation went from $4.45 billion in the first quarter of 2015 to $2.66 billion in the first quarter of this year. The upside is that staff was only reduced by 1 percent over the same time frame.

The bank suffered a 23 percent drop in investment banking revenue in the first quarter. Fixed income trading revenue fell 47 percent to $1.66 billion and equities trading declined 23 percent as well, generating $1.78 billion. It translates into Goldman's lowest revenue tally since late 2011.

"This is a performance-driven culture and our performance wasn't great" in the first quarter, Goldman CFO Harvey Schwartz said to an analyst. He added later, "I certainly won't sit here and tell you we're happy about this quarter."

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Cuts to compensation weren't exclusive to Goldman.

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Morgan Stanley announced earnings Monday, and revealed a 19 percent reduction in pay and benefits, which fell to $3.68 billion year over year. Staffing at the bank declined just 2 percent over that time.

"Right now, the market is rewarding companies that control costs better," said Justin Fuller, senior director at Fitch Ratings.

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Consumer banks cut pay as well, and Wall Street bankers and traders in particular saw some of the deepest cuts.

JPMorgan Chase, which announced earnings last week, reported a 5 percent reduction in overall pay and 14 percent cuts to compensation at its corporate and investment bank.

At Citigroup, which didn't highlight compensation by division, pay rose 1 percent in the first quarter compared to the same time frame in 2015. And at Bank of America, which doesn't point out specifics on compensation, personnel expenses shrunk year over year by nearly 8 percent, although head count fell 3 percent. A representative for BofA said "personnel" expenses factor in both compensation and benefits, for all staffers from bankers to tellers and support staff.

Read MoreWall Street bonuses take a hit as profits fall

The difference in reductions in compensation for investment banks Goldman and Morgan Stanley contrasted against that of consumer banks reveals a stark picture for Wall Street pay. Last year, according to a study from New York state Comptroller Thomas DiNapoli, bonuses fell about 9 percent amid shrinking profitability.