Wall Street Employees Unhappy About 2008 Bonuses

A major caveat: the survey cited below comes from a “financial jobs website.” Presumably, users of that sort of site either have no job or are looking to change jobs and therefore are not particularly happy. Nevertheless, the last few years were particularly fat, and the young ‘uns appeared to have gotten conditioned to the idea of big money.

From Bloomberg:

About 79 percent of Wall Street employees responding to an online poll this month said they received a bonus for 2008, more than the 66 percent who expected to get a reward in October, according to eFinancialCareers.Com.

Of the people who said they received a bonus, 46 percent said it was higher than last year, eFinancialCareers, a unit of Dice Holdings Inc…..46 percent of people responding to the poll said they were dissatisfied with their bonus

Yves here. Presumably, those two 46% groups don’t overlap too much. Back to the artilce:

“What it shows is the bonus culture is very deep-set in the securities industry,” said John Benson, founder and chief executive officer of the Web site. “There’s an entitlement culture amongst a number of people in the industry, which I think in the current environment is very misplaced.”…

“I have been a defender of the bonus system in the past because it provides banks with a degree of flexibility on their cost structure,” Benson said. “I think most people on Main Street would say their organization incurred losses of this size that very few people in the organization if anybody would receive bonuses at all.”

Most of the people who reported a drop in their bonus said it fell between 11 percent and 50 percent, while the biggest portion of increases were 10 percent or less, the survey found.

In the stone ages on Wall Street, most everyone understood it was better to lodge a C performance in an A year than an A performance in a C year. Clearly, the clock is being rolled back.

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51 comments

  1. Araceli

    Why is a financial worker any different than other business worker, doctors, laywers or accountants who do NOT receive bonuses unless the corporation MAKES money. This is meltdown of capitalism in the making. The movers of CAPITAL don’t believe in their own game. WOW.

  2. Beanster

    Agree with Yves’ “stone ages” comment – small data point but I just spoke with an upset Goldman banker who won’t reap the rewards from having his best year in 08. Quelle surprise!

    It would be almost quaint for a banker to be looking out for good of the firm (and, heaven forbid, the shareholders), and you’re considered altruistic if you fight for your group and not just yourself.

  3. Anonymous

    My word verification for this post is ‘stool’, as in what I’d like to dump on the head of these self-entitled jackasses.

    Here’s a thought, morons. Almost every one of you clowns failed to protect client assets from Aug 2007 up to now. Why do you feel your performance merits continued employment, let alone a bonus?

  4. S

    All clear now: we get Dudley at the NY Fed. Another GS alumni and another architect of the failed programs heretofore. Totally unbelievable that this is what we get. Circling the drain.

  5. Anonymous

    Has anyone done an analysis of the net profits of the financial industry over the past 10 years? I bet they are on par with the airline industry by now.

  6. Boomka

    Well to be fair the reason people on wall street expect bonuses is because their base salaries are much smaller than in comparable positions in other industries.

    For example, in the investment bank I work in, a lot of very talented programmers receive base salaries of 95-115k. Now compare that to firms like Google and Apple, where a decent software engineer makes (reportedly) over 200k a year.

  7. fresno dan

    Anonymous at 11;13am
    Being old, and reading way too many blogs to remember anything accurately, there was an analysis done of the investment banks that show that they lost all the money they made since ?1990? – ?1980? and than some.

  8. Bill

    Hey Boomka,

    That engineer at Google or Apple creates something of value and is worth that much. The banker is leech on society, and have been exposed for the thieves that they are. 100k a year is enough for the bankers when they have caused the financial and possibly political meltdown of the USA. Bonuses you must be kidding. Screw um.

  9. Anonymous

    On low base salaries on Wall Street for support staff:

    If they really think they can make more at Google, why do they not go to Google???? Talk is cheap.

    Like everybody says: In any other industry, whether the wages are high or low compared to other industries, if the company loses money, there will be scant to no bonuses at all.

    This is not even touching upon the fact that if these companies had not been bailed out, there would have been no bonuses at all, they would have gone broke, meaning that all these entitlement crybabies would have lost their job, thier benefits and their pensions.

    Main Steet is losing all of this while propping up Wall Street!!!

    Let’s stop this nonsesne once and for all and nationalize all insolvent banks.

  10. Anonymous

    “Well to be fair the reason people on wall street expect bonuses is because their base salaries are much smaller than in comparable positions in other industries.”

    Well to be fair, they’re pretty stupid and naive to be sold that bag of goods by their management. If you expect $100k and your base is $60k, you’re not allowed to complain if you get $70k.

  11. Anonymous

    Support staff shupport staff… whatever. You win and lose as a team. If the team puts up bad numbers for whatever reason, no bonus. You can ferret out the reason in the off season then come back an try again.

    All this bullcrap about “oh, it wasn’t my fault, my decisions didn’t matter so that bonus is mine whether we win or lose” is just that – bullcrap.

    The *organizations* melted down trillions of dollars of shareholder wealth in a span of a year and half, then insists on getting the *taxpayers* to bail them out and keep their bonus structures in place? Hell no.

    Silly rabbit, bonuses are for *performance*.

  12. Ken

    An anonymous poster wrote: Almost every one of you clowns failed to protect client assets from Aug 2007 up to now. Why do you feel your performance merits continued employment, let alone a bonus?

    Does their job description say anything about protecting client assets? I ask this in all seriousness, as I view one of the greatest shortcomings of these firms to be the failure to align employee incentives with the ostensible purposes of the firm. If you make a 2% commission on every security sale, why should you care whether it makes money for the client or not?

  13. Anonymous

    In response to Boomka’s observation about the low pay of programmers at his investment bank, that pay scale is actually pretty typical across the software development world. The $200K salaries at Google and Apple are much, much higher than most experienced, well-qualified programmers make “on Main Street.” I make this observation as one who has run a software development firm for over 20 years that works with clients from start-ups to Fortune 50 companies.

  14. Anonymous

    Where oh where is Eliot Spitzer? I think he’s setting up his bat-cave to make a major comeback.

  15. Eric L. Prentis

    Merrill Lynch lost $27 billion dollars in 2008, received $10 billion in a government bailout yet paid out, early, $4 billion dollars in bonuses to their employees. Without the $55 billion dollars in government bailouts and $118 billion in government asset guarantees, both Bank of America and Merrill Lynch would be bankrupt and would be unable to pay any bonuses whatsoever. The sense of entitlement by the financial ruling class is outrageous, they are simply screwing the taxpayers while the slimy-on-the-take Congress says and does nothing. Lets make Eliot Spitzer a special prosecutor investigating financial system accounting fraud, executive compensation, bank regulation, lobbying, bank business practices and what to do about the Federal Reserve.

  16. cap vandal

    Most of the bonus programs I had anything to do with had a “death penalty” if the overall corporate goals weren’t met.

    I would say that the incentive pay structure needs to be rethought.

    There needs to be better alignment, which isn’t easy, but is doable.

    Plus, any bonus that is really just “built in” or more or less automatic needs to be moved to salary and not be called a “bonus”.

  17. Anonymous

    Wonder how these folks are going to feel next year when the firms they worked for are nationalized, broken up and sold off?

  18. Anonymous

    what’s shocking is you guys qoute these numbers like $100K at one frim of $200K at apple or google.

    yet the whineing about some poor slub pulling down $60K as a machinist at boeing and going on stick was deafing.

    that’s why america is finished.

  19. Anonymous

    Every single person chooses whom to work for and (if they show any signs of intelligence) know going in how much they will be paid. If they choose to work for a base of 50k with potential bonuses going much higher, fine. If they choose to go for a base 100k with no bonuses, fine. In our system which has been so thoroughly subverted you have the choice of taking the high or low risk and as such have the chance of making more or less in either of these jobs. For anyone who took the 50k and potential bonus, I have no problem with looking them square in the eye and telling them ‘too bad. You spun the wheel and won many times. This time you lost. You choose whether to spin it again.’
    This is the glorious part of our Free Market. Its not a lack of rules, its a set of rules which gives everyone the freedom to make choices based upon the degree of risk they are comfortable with and have the ability to win or lose. We have lost so much with losing our ability to lose….

  20. PQuincy

    Regarding Boomka’s point: it looks to me that staff (say, programmers) taking a position on Wall Street made exactly the ‘ownership society’ move that Bush recommended for us all: potentially large rewards, but with risk moved from institutions to individuals.

    In the past years, those programmers probably made much more than they would have in the non-finance economy. Fair enough. But now the risk has tilted the other way, and they have NO right to complain about earning less. They took Bush’s bargain.

    The problem is that huge swaths of society were supposed to buy into Bush’s bargain who could not afford to take on risk (even in return for potential reward), because the risk of losing had catastrophic consequences for them.

    Those programmers making ‘only’ $100K will not be going hungry.

  21. Anonymous

    Well is that just tough damn shit. these thieving bastards produce absolutely nothing while scalping the profits and they are upset. Cry me a frigging river.

  22. Yves Smith

    I personally know top software people at Apple (as in working on iPhone apps, very senior). They most certainly do NOT make $200k in cash comp.

  23. Airport Genius

    I don’t personally know anybody making more than $200k. But if I have my math right (big if) couldn’t that $4 billion one year taxpayer bonus have been divided up evenly between 25,000 folks @ $40,k a year for 4 years? I’ll keep that in mind when I loose my glamorous (32 year) airline career stacking bags in the belly of airplanes.
    I can has a pitchfork 2!!

  24. Anonymous

    “For anyone who took the 50k and potential bonus, I have no problem with looking them square in the eye and telling them ‘too bad. You spun the wheel and won many times. This time you lost. You choose whether to spin it again.’ “

    right on!!well said. bingo!!!!

  25. foesskewered

    And you wonder why so many people are redoing the which profession is closer to the devil list. Ubs seems to be bucking the trend, their bonuses seem to have outraged the public not their employees. Makes you wonder, are the sovereign funds not paying attention or do they like to see their money going to miscellaneous and directors fees?

  26. Anonymous

    Boomka, you’re way off.

    I’m a Senior Software Engineer at one of the big software companies. With over 10yr experence, I make about $120k base.

    I’m not decent… I’m awesome.

  27. Anonymous

    Airport Genius Said:
    “…I can has a pitchfork 2!!”

    Responding to popular demand we are offering Elliot Spitzer Autographed Model Pitchforks for $100.00. First 2,500 purchasers will receive commemorative over-the-calf stockings w/ garters.

  28. babar ganesh

    on one hand:
    lots (tens of thousands, certainly on the same order as software engineers in finance) of software engineers got rich in silicon valley because they got call options in addition to their base salary and their companies happened to do well. some of these companies may have sold things to the government and made a profit doing so. working for a financial firm there is no such upside.

    on the other hand:
    i do find it _extremely_ obnoxious that people would take a bonus for granted. except in finance i haven’t seen people feel so entitled to a bonus. nobody working in finance should be surprised that volatility can work against you at times.

    also, nobody who was paying attention would have mistaken the oversized payouts of the past few years as evidence of personal worth or future income. counting on that future income and leveraging into it (necessary if you were to buy a place to live in nyc for instance) in the face of clear evidence was a foolish idea.

  29. Barthes Simpson

    If Wall Streeters don’t get bonuses then they can’t pay their maids, cooks and nannies

    -Melissa Francis CNBC

  30. Anonymous

    Re: Elizabeth Warren on the “Destruction of the Middle Class”.

    What have people spent their money on?

    Compare 1970 family to 2005 family; 32% less is spent on clothing in inflation adjusted dollars.

    Food, 18% less on food.

    Appliances: 52% less spent

    Cars: Per car cost has gone down 20%

    What went up, where is the family spending money? 76% increase on a mortgage costs!

    Healthcare insurance: 74% Increase

    Cars: Families have more cars

    Childcare: 100% increase; a new expense for the new generation

    Taxes: Increase of 25%

    Re: Here’s Prof. Elizabeth Warren on the “Destruction of the Middle Class”.
    When I saw it, I was rather shocked:
    http://www.youtube.com/watch?v=a…h? v=akVL7QY0S8A

    52 checks versus 104 paychecks; the odds have gone up for risk.

    Families are buying schools, i.e, living in expensive areas where there are better schools; parents would rather live next to a toxic dump than a school with low performance.

    Less savings, more debt, more people without health insurance. In 2001 1.4 million people lost health insurance, of those 800,000 earned more than $75,000 — people are losing their safety net.

    In 1970 it took 12 years to educate a child, e.g, you needed a high school diploma, paid for by taxpayers. In the space of a generation from 12 years to 18 years and the family pays for 1/3 of that today. That increases debt..

  31. Anonymous

    How about a bonus in the form of a slightly reduced prison sentence?

    Vinny Goldberg, Wz.K, M&M
    (Wiz Kid, Maverick, & Maestro of economic theory, research, and practice of all kinds)

  32. Anonymous

    “How about a bonus in the form of a slightly reduced prison sentence?”

    Briliant! I like the idea.

    For big fishes, they should be required to use their golden parachutes to pay for the cost of their prison time. Taxpayers should not pay any more cents for the cost of prison.

  33. Anonymous

    Thats OK, the banker class can hug their precious bonus when waiting for the guillotine to slam down. Some of these tone deaf millionaires would be better served reading history books instead of the WSJ, everyone else should know where looting and crushing the proles will lead.

  34. Jojo

    @Barthes Simpson said…

    If Wall Streeters don’t get bonuses then they can’t pay their maids, cooks and nannies

    -Melissa Francis CNBC

    That’s actually a good point.

    I know in Sillycon Valley that the expectation is for people to work 60-80 hour weeks. And typically your SO is working similar hours also.

    Companies need to pay more so their indentured slaves can hire help to do the chores.

    Unfortunately though, when you amortize the hours you have to work and the levels of stress that you have to endure, the amount of money you are making is actually fairly low on an hourly basis.

    I’d expect that Wall Street is similar.

  35. Anonymous

    There seems to be a consensus opinion on this thread that Wall Street is out of control and we KNOW it is. We had deluded ourselves that this ponzi scheme called the stock market actually worked even when nothing tangible was being created other than the carpal tunnel pains of investment bankers furiously punching numbers across a screen. So we went along with this charade in the good times quietly watching traders making bets on all sorts of contracts (futures, put & call)and the latest the sub-prime market.

    What are you prepared to do now that we're not in such good times. I suggest you join me on the 5th of November to meet in front of NYSE in a show of force the likes of which the world has never seen and we will close down that den of inequity. Do not forget the significance of this date (11/5) for it will be a day when symbols will be righted and wrongs corrected. Goodbye to the symbols of complacency and entitlement- join me.

  36. vendetta

    Dead on accurate with what is going on. I'll be joining you on the 5th of November but why wait why not get out there with a general strike like what went on in France yesterday. There is no reason why we can't get the same unity here. Any union leaders out there (teacher's, airlines, city & state workers, nurses, building trades, etc.) reading this thread can express there interest by chiming in and writing on this thread…You must give specifics so I know you are who you say you are (union numbers, etc.) I will know the state of angst or political motivation by either the silence or the comments posted here and will be in touch.

  37. Mark

    It should be clear to all bankers that variable compensation is variable for a reason. When times are good, bonuses are good. The fact that bank management made these decisions, knowing their very survival was dependent on the taxpayer is either the height of arrogance, complete ignorance or a form of looting. Anyway you look at it, bank management has displayed a lack of fitness. As a major stakeholder in these banks, it is time for the government to behave like a hostile investor and remove unfit senior bank management.

  38. Anonymous

    I have never seen so many STUPID, UNSUBSTANTIATED, and IGNORANT, comments as I have seen on this post. Not one of you know the details of the the bonuses paid such as the amount paid to each employee, the employee’s position, the employees contribution to the company. Bonuses were paid to secretary and support staff as well executives and traders. You all seem to think that only the banks that receive TARP funds are the ones that paid all of the 18+ billion dollars in bonus. NOT TRUE. There are many smaller privately held firms that are also included in the reported 18+ billion dollar bonus; and some of these firms where profitable. I think President Obama said it the best; “OUTRAGEOUS!”. He was outraged because it was not he who could dictate to who and how much pay was received. As for all who feel some people’s pay is not fair and equitable. you must must just love Presidents Obama’s desire to increase the reach of UNIONS so that the UNIONS and the GOVERNMENT can control how much an employee is to be paid rather that the employee being paid based on his contribution to the success of firm. And yes employees do deserve to be paid bonuses when the economy is down. Now who knows how much TAX Dollars are paid to US Government representatives and there staff for the their part in causing the house and credit problems we all are facing.

  39. Mark

    Since I left the post before Anonymous, perhaps Anonymous would like to know that I was recently in a position in the financial services industry that compiled and evaluated who would receive a bonus and how much. Whether secretary, mid manager or top trader, the fact of the matter is bonus’s are variable for a reason. If the institution did poorly, as almost every bank did, as an investor, I would expect management to show responsibility and not take money from the shareholders to pay bonuses. If the institution received TARP funds or additional government support through extra Fed borrowings etc, I would not expect management to take money from taxpayers and pay bonuses.

    How you turn this into Obama wants more unions is beyond me. Based on your point of view, I suspect you would argue that labor unions should be giving deep concessions in the auto industry. Well frankly, labor should be doing the same in financial services.

  40. Anonymous

    These investment banks were supposed to be bankrupted and all the employees without salary if US Government did not say “Bail out money from every single American worker’s tax money”. So, these employees are supposed to be on the street without bonus even salary. Wall Street people are completely insane to insist on having bonus.

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