Wall Street Pay Bounces Back
By DANIEL MACHT
Updated 1:45 AM EST, Sun, Apr 26, 2009
Thousands of Wall Streeters have been pushed to the exits, but those who remain could be handsomely rewarded.
After hemorrhaging profits last year, many major banks posted first quarter profits that beat analyst expectations. Now they're tucking away coin from the rebound to pay their peeps big bonuses again, The New York Times reported.
The biggest banks -- which include Goldman Sachs, Morgan Stanley, Citigroup, JP Morgan Chase and Bank of America -- set aside more than $36 billion for compensation for the first quarter, according to The Times. If the trend continues, finance employees are set to see their wallets thicken to pre-financial crisis levels, the paper reported.
“Like everything on Wall Street, they’re starting to sin again,” Brad Hintz, an analyst at Sanford C. Bernstein, told the Times. “As you see a recovery, you’ll see everybody’s compensation beginning to rise.”
Critics say that instead of funneling profits back to workers, the banks should instead fatten dividends for shareholders who have seen their investments plummet.
The banks counter that nothing is set in stone, especially if the year does not turn out to be so profitable.
Still, Goldman Sachs is the poster child to illustrate the new trend, according to the Times.
Last year, bank employees took a haircut of nearly half their pay. A few more good quarters, though, and the bank's average pay could add up to $569,220 per worker for the year. That approaches the record amount Goldman paid out to workers in 2007 -- right before the economy fell off a cliff.
First Published: Apr 26, 2009 12:28 AM EST
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