You’re at a bar on Wall Street during happy hour, enjoying an after-work drink. A group of around two dozen well-dressed professionals in their early 30s saunter in and order a round of beers. Cheap beers – Bud Lights mostly. The mood is rather somber for a group this large. Under no circumstances would you believe that each of these people was just handed a six-figure bonus check.
It must be a strange feeling, being disappointed with a check so large. But for investment bankers who put in grueling hours, sacrifice their personal lives and amass mountains of debt, low six-figure bonuses are just that – low.
Members of this group – an entire class of associates from a well-known global bank – can sense their colleagues aren’t pleased with their numbers either, judging by their disposition, or maybe even their drink orders. So how do they figure out where they stand without boldly asking each colleague what they’re taking home? It’s called a “hat drop.”
Members of this group, who asked to keep the name of their employer confidential, each wrote their bonus number down on a scrap of paper and tossed it into a hat. One volunteer then read the numbers aloud, giving everyone an idea where they stood without naming names. The range of bonuses for these bankers was around $35,000, said one employee who attended the event.
After one more round of beers, everyone packed up their coats and went home. No swinging from chandeliers, no ordering $1,000 bottles of champagne – just another payday.
The general consensus was: “Is doing this job worth it anymore?” said the employee.
As part of its strategic review, Barclays will cut roughly 3,700 jobs over the next three years, with the majority of the cuts affecting the investment banking division. Barclays lowered its proportion of compensation to revenues from 47% to 39% during the year, and will look to target a ratio in the mid-30s moving forward.
Two middlemen interdealer brokerage firms – ICAP and R.P. Martin Holdings – are a new focus for U.S. regulators in their Libor rate-rigging probe. Employees at the two U.K. firms may have had a role in helping traders rig submissions.
Goldman Sachs appears poised to miss profitability targets that would result in an eight-figure bonus for CEO Lloyd Blankfein and other top executives.
Barclays’ efforts to defend itself against accusations that it attempted to manipulate U.S. energy markets may be stifled by a series of instant messages sent between traders. If not incriminating, the IMs are at the bare minimum profane.
As many as 25% of private equity firms may soon find themselves starving for cash as a lack of fundraising continues to pressure the buyout side of the business.
In a potentially ominous sign, Barclays Chief Executive Antony Jenkins appeared to go out of his way to investment banking chief Rich Ricci during his presentation.
Only 3% of institutional hedge fund investors said their returns in 2012 exceeded their expectations. More than 40% were disappointed, the highest level since the survey began in 2008.
Buzz Around the Office
If you’re a wealth manager and are looking for a new customer, shoot a note to Angelina Jolie and Brad Pitt’s 4-year-old daughter. She’s making $3,000 per week plus per diem for playing herself in a non-speaking movie role. Depressing.
List of the Day: Resume Tips
Here are three things that you should delete from your resume today.
- Your mission statement.
- The phrase “references available upon request.”
- The word “I” or “me.”