The Options Group’s figures actually pertain to total compensation, making them all the more depressing. It thinks compensation will fall by 33% in FICC (Johnson thinks bonuses will be down 35-45%), by 29% in equities (Johnson thinks bonuses will be down 20-30%) and by 14% in investment banking (Johnson thinks bonuses will be down 10-20%). Options thinks the compensation fall will be biggest in the US and EMEA (27%), moderate in Asia (19%) and negligible in Latin America (1%). Johnson has no opinion about the regions.
Over at JPMorgan, however, the pain may not be so bad. Bloomberg reports that managers there have been telling their people that bonuses will be, “lower to unchanged” this year. This doesn’t sound too terrible; in the first nine months compensation at the investment was down a mere 3% year-on-year.
The pain of a lower bonus may also be more bearable if you’re under 45 and can still see other people earning more than you. The StumblingandMumbling blog points to a new study suggesting that under 45s are happy if other people earn more than them, but over 45s aren’t. It attributes this to the fact that young people interpret other people’s high incomes as signs that they can achieve the same through hard work; older people just see them as evidence they’ve failed.
On this note, the Office of National Statistics released some illuminating statistics yesterday. They show the average man in the UK working a 40.3 hour week and earning 539. If you work in financial services and want to feel better about your bonus, this is the median pay by age in the UK in 2011:
UK households spent an average of 474 a week, in total, in 2011. (ONS)
VTB is hiring in Dubai and might hire four people from Credit Suisse!!! (Bloomberg)
You don’t want to be working in the syndicated loans team at a French bank right now. (Bloomberg)
Insurers are buying banks’ distressed assets. (Bloomberg)
RenCap has let go of a veteran strategist with 14 years’ experience. (Bloomberg)
Looks like Goldman will need some fund of funds analysts. (WSJ)
Standard & Poor’s Ratings Services downgraded more than a dozen giant global banks, including the six biggest U.S. financial institutions. (WSJ)
The City would be protected from a Europe-wide financial transaction tax (FTT) that could cost it 26bn a year, George Osborne insisted on Tuesday. (Guardian)
EU reforms preventing the Big Four from offering most types of consulting to their audit clients in the EU, come a step closer to materialising. (Financial Times)
One London-based analyst said he thought HSBC could be forced to pay an additional $300m (193m) for the fiscal year 2011/2012, taking the total cost of the levy to the bank as much as $900m. (Telegraph)
MF Global made two directional bets: the bet that southern Europe will pay off, and the bet that the market will remain tolerant of southern Europe risk in the meantime. (BradDeLong)
What on earth did Hank Paulson think his job was in the summer of 2008? (FelixSalmon)
Harvard Occupiers heckled a Goldman Sachs recruiting event: When the group reached the (Office of Career Services offices, ralliers stood outside the building for a few minutes, yelling, “Goldman Sachs, you can’t hide. We can see your greedy side.” (TheCollegeFix)