Bloomberg News

Wall Street Employees Expect Bonuses to Shrink, Survey Shows

October 10, 2011

(Updates with surveyor’s comments in the fourth paragraph.)

Oct. 10 (Bloomberg) -- More Wall Street finance professionals expect bonuses to fall than rise over the next three years, according to an survey, as weak markets and new regulations cut into trading revenue.

About 80 percent of the 1,098 people who responded to the e-mailed query in the U.S. said they don’t expect bigger bonuses for the industry over the next three years, with 46 percent expecting them to shrink, the job-search website said in a statement today. Forty-one percent said their own bonus will climb this year, while 30 percent expect less, the survey found.

Approximately half of respondents from hedge funds and boutique banks expected a bigger bonus than last year, while 36 percent of their counterparts at commercial and so-called bulge- bracket banks expected an increase, compared with 38 percent anticipating a smaller package. Analysts including Rochdale Securities LLC’s Richard Bove have predicted lower pay at the biggest U.S. lenders as trading revenue is estimated to have fallen for the second straight quarter.

“Employees at the large investment and commercial banks are definitely more negative around expectations this year and the next three years, and that reflects the reality of what the large banks are dealing with,” Constance Melrose, managing director of eFinancialCareers North America, said in an interview. “The candy bar has shrunk due to regulatory pressures and market conditions, and firms are going to have to make some tough choices about who gets the first bite.”

This Year’s Bonus

About 92 percent of those responding expect to receive some kind of bonus this year, according to eFinancialCareers, a unit of Dice Holdings Inc. The survey was conducted from Sept. 20 to Oct. 3 and received responses from front-office and support staff at investment and commercial banks, hedge funds and asset managers.

Of the respondents who anticipate a bigger bonus, 22 percent attributed it to their firm’s performance and 45 percent said it’s related to personal accomplishments. Of those who expect a decline, 40 percent said it was because of their firm’s performance and 35 percent attributed it to market conditions.

Only 20 percent of those surveyed expect industry bonuses to climb over the next three years, compared with 34 percent in last year’s survey. Market conditions were the greatest concern for 68 percent of respondents, up from 59 percent last year.

“In recent years, this is the most pessimistic people have been,” Melrose said.

About 14 percent said they are unsure about their employment status because of job cuts at their firm. Thirty-nine percent said compensation was the most important factor in their decision to work in the financial services industry, up from 37 percent last year.

--Editors: Rick Green, William Ahearn

To contact the reporter on this story: Michael J. Moore in New York at

To contact the editor responsible for this story: David Scheer at

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