London: It's bonus season for Wall Street, and while Goldman Sachs Group Inc's employees are learning the extent of their 2010 pay cuts, they'll still take home more than rivals at JPMorgan Chase and Co.
JPMorgan started telling employees of year-end payouts this week, while Morgan Stanley will do it yesterday, people told of the banks' plans said, requesting anonymity because the timing isn't public. Citigroup, which awarded executive bonuses last Tuesday, started telling traders and investment bankers about payouts the next day, said Jon Diat, a spokesman. On Thursday, it said it gave about $50 million (Dh183.5 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 in 2010, or 2.4 per cent 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 per cent.
"As a rule of thumb, bonuses are going to be down 5 per cent to 10 per cent on last year as revenues have fallen," said Shaun Springer, chief executive officer of London-based Square Mile Services Ltd., 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.
Citigroup's pay
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 Chief Operating Officer John Havens received stock worth $4.75 million as of the share's closing price on Tuesday, when the bonuses were awarded, according to Thursday's disclosures. Brian Leach, the chief risk officer, got stock worth $5.16 million.