The Homa Files

Excerpted from WSJ, “On Street, the Incredible Shrinking Bonus”, Nov. 4, 2008

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Ken’s Qs:

(1) Is it just my imagination or is the market down about 1/3 with most firms crumbled to the ground ?

(2) Wonder why there’s backlash against the top 5% ?

(3) How do these guys sleep at night ?

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Among investment bankers who maintain contact with corporate clients but don’t make trading decisions, managing directors could see their bonus fall 50% to between $900,000 and $1.1 million.

Managing directors (who make trading decisions) could see their bonus fall 50% to $750,000 to $950,000. Their base pay is about $200,000 a year.

Bonuses will shrink less in businesses that have held up relatively well. In foreign-exchange trading, a managing director could expect a 15% drop in bonus to $1 million to $1.5 million

Vice presidents with three years of experience could expect a 55% cut in bonus to $200,000 to $250,000, on top of a base of $130,000 to $150,000.

In commodities, where prices surged and then fell, a managing director could see a 25% drop to a bonus of $3.5 million to $4 million.

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But at Citigroup.’s Phibro commodities-trading unit, where results topped last year’s performance, Andrew Hall, who runs the unit, is slated to receive compensation for fiscal 2008 topping $125 million, according to people familiar with the firm. Other employees of Phibro, of Westport, Conn., also are getting big payments, these people said.

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Source:
http://online.wsj.com/article/SB122593559284203785.html

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This entry was posted on November 7, 2008 at 6:37 am and is filed under Financial Crisis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.