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Merrill’s measly bonuses

Surprise, surprise, Merrill Lynch hasn’t paid particularly generous bonuses (at all).

Merrill unveiled the dimensions of its payouts late last week and, according to headhunters, the results weren’t pretty.

“Performing people have been paid flat to marginally down, but the majority – and that’s a large majority – are down 60-70% on last year, particularly in fixed income sales and research,” says a partner at one headhunting firm. “Origination and investment banking are better, with cuts of 40-50%.”

Plenty of people in Merrill’s fixed income business are also said to have received zero bonuses, suggesting the bank plans to cull a few more London bankers in the coming months.

However, Merrill isn’t just busy underpaying and rooting out poor performers: under Thain, the bank is also embarking on a programme of upgrading – and that means hiring.

So far, this has been limited to a few big cheeses in the US, but recruiters say London hiring is just around the corner.

“It’s just the CEO bringing in his own boys at this point,” say Jason Kennedy of search firm Kennedy Associates. “But there will be selective hiring to come.”

Consultants working for the bank say hiring is on the cards in wealth management, commodities and investment banking, and that the bank will be looking to upgrade its credit risk function. “They want to replace the people who got them into this mess,” says one.

Comments (7)

  1. This is surprising since Morgan Stanley had a bad year but still paid ok.I think a lot of folks will bail,l saw the latest anti-Merrill Lynch comments on http://www.randombanker.blogspot.com.He seems to know what’s going on the firm.It certainly doesn’t sound pretty at all.Another 15 byn down the tubes.

  2. Well, Eric, it is not surprising actually, because losses at Merrill have been far bigger than at Morgan Stanley, and Merrill has a much tougher reputation than Morgan at firing people. I have heard, however, that there were a few cuts in London and New York last week, but am not sure about the dimension – definitely more than the 8 reported in the link!!

  3. What sort of level is payment of guaranteed bonus in stock kicking-in in all these firms? I was told only >150k paid in stock with anything less paid in cash but that was back in August.

    guaranteed bonus Reply
  4. Well I can tell you it is more like >75-100k paid in stock

  5. 30-40% of overall comp in stocks this year, vesting over 4 years. Not as bad as UBS …

  6. don’t know from where thy have this figures but performing people in my area (cash equities) received a higher bonus cheque than last year

  7. Merrill needed bailing out… everyone should have been bailed out not paid a bonus… its appalling…the law should check in….

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