Wall Street Bonus Bloodbath

It looks like it is going to be an ugly bonus season on Wall Street.

Here's the latest breakdown from Robert Frank from the Wall Street Journal:

While pay may increase slightly in the broader financial-services world—including retail banks, hedge funds and private-equity firms—bonuses at the core Wall Street firms are likely to take a double-digit hit, analysts and pay consultants say. On Monday, New York Stock Exchange member firms that conduct business with the public reported third-quarter after-tax profits of $4.7 billion, down from $8.7 billion in the third-quarter of 2009.

Wall Street bonuses are likely to be down 22% to 28% this year, according to Options Group, an executive-search and consulting firm. The drop follows last year's much-criticized surge in banker pay and highlights growing uncertainty on Wall Street ahead of regulatory scrutiny and weak financial markets.

Bankers at Goldman Sachs Group Inc., Morgan Stanley, Citigroup Inc., Bank of AmericaCorp.'s Merrill Lynch and J.P. Morgan Chase & Co. say they are being told bonus pools are likely to be down between 10% to 25%. Some divisions, like proprietary trading, could be down as much as 50%, bankers said.

Exact bonus amounts won't be known for another month or two, since most banks pay out bonuses early in the new year. Yet senior bankers who have seen bonus-pool estimates say many employees are likely to be disappointed.

One Citi banker said colleagues who have been coming out of compensation meetings in the past two weeks "look like they've been hit by a truck."

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Companies mentioned in this post

Goldman Sachs

Morgan Stanley


Bank of America

JPMorgan Stanley


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