Bloomberg News

Bonuses Met Wall Street Workers’ Expectations, Survey Shows

February 13, 2012

(Adds hedge-fund pay in the eighth paragraph.)

Feb. 6 (Bloomberg) -- More than half of Wall Street employees said year-end bonuses met or exceeded their expectations as firms began notifying workers of payouts last month, according to an eFinancialCareers.com survey.

About 45 percent of the 1,006 people who responded to an e- mailed query in the U.S. said their bonus matched their expectations, with 11 percent getting a higher payout than they had anticipated, the job-search website said today in a statement. Thirty-five percent were disappointed by their bonus, the survey found.

Wall Street firms are curbing pay and changing formulas to limit expenses, with some giving more stock and deferred cash and less immediate payout. Revenue shrank last year as mergers and trading slowed, leading firms including Morgan Stanley and Credit Suisse Group AG to cut compensation by as much as 30 percent for senior bankers.

“Managing compensation expectations is one of Wall Street’s premier arts,” Constance Melrose, managing director of eFinancialCareers North America, said in the statement. “Firms loathe losing top performers, and approach every bonus season concerned that murmurs of dissatisfaction escalate.”

The survey was conducted from Jan. 2 to Jan. 16 and drew responses from front-office and support staff at investment and commercial banks, hedge funds and asset managers, according to eFinancialCareers, a unit of Dice Holdings Inc. The tally was limited to people who had already been informed of their awards. EFinancialCareers plans to conduct additional surveys to include professionals who were notified after that period.

Disappointing Raises

About 32 percent of those who said their payout fell short of expectations got a bigger bonus than for 2010, according to the survey. A larger portion of the disappointed group than last year had salaries of more than $200,000, indicating more senior people faced pay cuts this year, according to the statement.

“The cohort at the higher end is taking a bit more of the impact,” Melrose said in an interview. “Even when the bulge- brackets are trying to keep their higher performers as satisfied as they can be, they’re going to have struggles.”

Hedge funds and so-called boutique firms saw smaller declines in compensation than large banks and on average paid out a higher portion of bonuses in unrestricted cash, driving concerns about defections among top talent, Melrose said.

“If you’re looking to get all of your bonus in cash, you probably don’t want to be at a bulge-bracket bank,” she said.

About 9 percent of those responding said they had no expectations for their bonus.

--Editors: David Scheer, William Ahearn

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net


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