It?s bonus season for Wall Street, and while Goldman Sachs Group?s employees are learning the extent of their 2010 pay cuts, they?ll still take home more than rivals at JPMorgan Chase & Co.
JPMorgan started telling employees of year-end payouts this week, while Morgan Stanley will do it today, people told of the banks? plans said, requesting anonymity because the timing isn?t public. Citigroup which awarded executive bonuses on January 18, started telling traders and investment bankers about payouts the next day, said Jon Diat, a spokesman. Yesterday, it said it gave about $50 million in stock to 15 top executives. London- based Barclays Plc?s bankers will get the news mid-February, two people said.
US and European banks are under pressure to curb bonuses after taxpayers were forced to bail out the industry during the financial crisis. JPMorgan?s investment bank set aside enough money to pay an average of $369,651 to each employee for 2010, or 2.4% less than in 2009, according to the company?s year-end financial statements. Goldman Sachs?s pool equates to an average of $430,700, a reduction of 14%.
?As a rule of thumb, bonuses are going to be down 5 percent to 10 percent on last year as revenues have fallen,? said Shaun Springer, chief executive officer of London-based Square Mile Services, which advises firms on compensation.
Investment banks set aside a portion of revenue to reward employees and typically decide bonuses at the end of the year based on annual results. Average pay per worker doesn?t reflect the amount of money each employee actually receives. Top executives sometimes receive multimillion-dollar awards, while clerical workers get less.
The four New York-based banks will spend a combined $84.4 billion, or an average of $141,192 apiece, on their 598,073 workers, according to financial reports released since January 14.
That figure is pulled down by the average at Citigroup — $93,962 last year — because the bank has 260,000 employees, many of them tellers, commercial bankers and transaction processors, who earn lower pay. Citigroup doesn?t break out pay for its investment-banking and trading division, where workers get multiples of what most retail banking employees receive.
Newly promoted COO John Havens received stock worth $4.75 million as of the share?s closing price on January 18, when the bonuses were awarded, according to yesterday?s disclosures. Brian Leach, the chief risk officer, got stock worth $5.16 million. Citigroup chief financial officer John Gerspach got $2.33 million and vice chairman Lewis Kaden received $4.29 million. Americas consumer banking chief Manuel Medina-Mora got $4 million. Mike Corbat, head of Citi Holdings, got $4.88 million, as did the bank?s chief administrative officer, Don Callahan.
The bank disclosed last year that chief executive officer Vikram Pandit declined a 2010 bonus. Shannon Bell, a Citigroup spokeswoman, declined to elaborate on payouts.
Morgan Stanley cut the investment bank?s compensation pool by 2% to $7.08 billion. The firm doesn?t disclose the number of employees in the unit.
Companywide, Morgan Stanley paid its 62,542 employees an average $256,596 last year, up from $238,602 for each of the 60,494 employees at the end of 2009, figures released on Thursday show. The company?s 2010 pay accounts for a full-year ownership of the Smith Barney brokerage, compared with seven months in 2009.
The firm has told some employees to expect investment- banking bonuses to decline 10% to 30%, two people briefed on the matter said last month.
JPMorgan, which reported earnings January 14, set aside $9.73 billion for 26,314 workers at its investment bank.
Employees at Bank of America, based in Charlotte, North Carolina, will be told their bonuses January 26, a person with knowledge of the plan said. The bank reports fourth-quarter earnings later today.