BUSINESS High-earning bankers have little holiday cheer as low bonuses, layoffs foreseen By John Aidan Byrne December 21, 2019 | 9:58pm Enlarge Image "We've been getting a lot of phone calls and messages, too, from people in financial services who are worried about their jobs," said financial services headhunter Sanj Hingorani, above.J.C. RIce MORE ON: BANKERS Arrest warrant issued for UBS banker over death of Anguilla hotel worker Accused killer banker skips court, citing safety fears Merrill Lynch banker drugged, sexually assaulted woman in Italy: suit How a Wall Street banker escaped the grind and wrote a novel Forget the Champagne and fancy appetizers for Wall Streeters’ New Year festivities. High-earning bankers and traders are not in a party mood this year, fearing a mass wave of pink slips and lower bonuses. Morgan Stanley alone is said to be planning a 2% reduction of its workforce, amounting to as many as 1,500 employees. Despite the white-hot end-of-year stock market and roaring US economy, many financial firms are tamping down bonus expectations, citing concerns about the outlook for the global economy and the lackluster start to 2019. That comes as increasing automation and cost controls threaten job security for bankers, traders and back-office financial services workers. “There are not too many on Wall Street happy about their bonus expectations for this year,” financial services headhunter Sanj Hingorani told The Post. “We’ve been getting a lot of phone calls and messages, too, from people in financial services who are worried about their jobs.” Forecasts hint at lower year-end bonuses on Wall Street for the second year in a row. In 2018, the typical banker in New York pulled in an average salary, excluding bonus, of nearly $400,000. The average 2018 Wall Street bonus — while not bad for the typical Main Street worker — plunged by 17%, to $153,700, according to a study by the New York State Comptroller Thomas DiNapoli. For high rollers, bonuses — often a combination of cash and deferred stock — can be even larger than their base salaries, with some star performers raking in millions. The overall Street bonus payouts, typically distributed early in the new year, could dip as much as 4 percent, according to Johnson Associates, a widely followed compensation consultant. A report by Axios paints a bleaker picture, saying New York City officials have estimated the sum set aside by Wall Street for bonuses will plunge by as much as 9% this year — to about $25 billion from $27.5 billion in 2018. “It’s funny, the way people are behaving, you’d think this was a down market,” one trading professional said. “Everyone is terrified of the election, and I’m not hearing anyone brag about their bonus.” Faster trading machines are also wreaking havoc on Wall Street jobs. “Trading is seeing exponential growth in automation,” said Zach Abraham, chief investment officer and principal at Bulwark Capital Management in Washington, DC. “Trading commissions are down, and there is consolidation of jobs on desks because of this automation.” Even the machines may be replacing each other, as better, slicker boxes reduce the need for hands-on personnel and warehouse space. The job cuts at Morgan Stanley lean toward the technology and operations side worldwide, a trend that may be replicated at other financial services firms in the coming months, according to people familiar with the matter. Mark Lake, a spokesman for Morgan Stanley, had no comment https://nypost.com/2019/12/21/high-...medium=site buttons&utm_campaign=site buttons
Automation makes people more productive, short term there will be lots of disruptions. Long term, more jobs for bankers. All you have to do is look at engineering. Massive layoff when CAD CAM were introduced, then, more hiring and higher pay - more productive.
They can all cry a river, and learn to live within their means. Their average BONUS dropped to 153K? You how many regular folks would kill just for a regular salary as that bonus? For sitting behind a desk and going to meetings, with banker's hours? Fucking obscene.
That's actually a pretty small bonus. Must include grads and the back office in the average. "Sitting behind a desk and going to meetings." Actually, too much of that and you lose your job faster than you can take a piss. I saw it many times: from the moment HR rang your phone, to the moment a security guard supervised your departure from the desk, was about 10 minutes. How many regular folks do you know that lose their job that fast? For a guy who trades, you sure hate those making the wealth
You have to consider that the person with the quals that get into banking have any number of other alternative jobs at that comp level, and btw "bankers hours" for an analyst or associate are 80 hours a week. It's a bit disingenuous to compare someone who worked their behind off in high school to get into a top college and worked their ass off there, went on to a career where they excelled to be exceptional enough to get into a top MBA program, and then opted for banking to "regular folks" when it comes to compensation. Not to defend the profession, it frankly sucks which is why I opted not to go into it, but their comp really isn't out of line with their skill set and how much of their life they have to destroy to do the job for very long. The few people who ended up in banking from my class are now 10 years on near median comp with the rest of us, just closer to the bottom in overall happiness!
You think that Banker comps 10 years out of Bschool compare to other endeavors 10 years out? I don't see that in my wife's MBA class (she graduated about 13 years ago). The Bankers are earnings between 500-1MM. The others (corporate jobs of some kind) are not getting 500k generally with some exceptions. I agree on the happiness.
A pretty big chunk of us became entrepreneurs. It's not terribly hard to start a company that's at $100K EBITDA in a couple years and has 50% CAGR up to at least mid 7 figures, so in a decade or so you're doing pretty well...or you sell or get venture funding and own a smaller piece of a much bigger pie. A bunch went into VC and a decent number into other private equity of some sort and they're all well into 7 figures with carry, so if you don't consider them bankers they're pretty much all doing better than the i-bankers. Those who stayed in consulting are probably just a tad under the bankers, not a ton of them still there though. Very few went corporate, but I agree with you that their comp isn't $500K. And a bunch started non-profits or social enterprise companies so they're mostly on the low end of median, although a couple of the social enterprise folks are now running pretty large organizations so they're definitely making over $150K. To be honest though, I'm imputing a lot of that because I know what everyone is doing and what the average salaries are in those fields for someone at their level. Except for a publicly disclosed exit, comp generally isn't really discussed a lot. And your wife probably has much better data, since I seem to remember that she went to Wharton or Columbia, both of which have both much bigger classes in absolute numbers and a much bigger portion who go into i-banking. I'm talking literally count on one hand sample size for my class who are still in i-banking and not really that many even to start.
Yep, my half-year bonus at unnamed fund was $150K (though I think it was actually $180K). I didn't even realize it was coming, my boss came and asked me how I liked my bonus. I asked him what bonus lol. He was pissed.
Bankers provide almost no perceivable value to society, are generally slimey and corrupt as hell, and have cost the average tax payer trillions in damages from the more frequent financial collapses since the invention of all this creative financial engineering. I couldn't imagine being awarded a 6 figure bonus for creating absolutely zero tangible value and just fabricating money out of thin air by abusing the markets and creative accounting. Bankers are why traders are looked at as degenerates. We, the tax payers, are funding their flagrant abuse of our financial systems. Need I remind you absolutely not one of these assholes have atoned for 2007-2009, or any previous financial crash. They get a massive payout either way, courtesy of us, and hand each other giant bonuses and pat each other on the back for another great year. These people should be getting prison sentences for Christmas. I honestly can't wait until robots take their jobs. Losing their bonuses and jobs couldn't happen to a better group of people.