It is a morning of bonus news; some retrospective and some contemporary.
In retrospective bonus news, various banks have been obliged to make regulatory filings clarifying how much they paid their code staff. These filings clarify to the extent to which some banks not only pay more than others, but pay a lot more cash than others.
Hence, we are told that, for 2010:
- Goldman Sachs paid 95 code staff in London an average of $2.8m (£1.8m) in cash initially and a total of $6.21m (£4m) for the year.
- Citigroup paid 95 code staff inLondonan average of £811k ($1.2m) in cash, and a total of £3.1m ($4.8m) for the year.
- JPMorgan paid an average of £264k ($405k) in cash, and total of £2.4m ($3.7m) for the year.
This is in addition to earlier information suggesting:
- Barclays Capital paid its average member of code staff £2.4m for 2010.
- RBS paid its average member of code staff £1.1m for 2010.
The figures therefore confirm that Goldman Sachs is considerably more generous, both in cash terms and overall, than any other bank. They also confirm that – among US banks – JPMorgan is not that generous at all.
The other big news this morning is more contemporary and concerns the 2011 bonus deferrals at Morgan Stanley.
The Wall Street Journal reports that:
- Morgan Stanley is going to inform its employees that bonuses have dropped sharply
- Morgan Stanley is capping cash bonus payouts at $125k (£81k)
- Pay for Morgan Stanley’s fixed income traders will fall 60%
- Pay for Morgan Stanley’s other investment bankers will fall 30-40%
- The amount of pay deferred will rise from an average of 65% to an average of 75%
This may sound bad, especially as Morgan Stanley had some of the most punitive deferrals last year and everyone will have been hoping for a reprieve.
However, it’s not so bad when you consider that Credit Suisse (which also had a very punitive deferral schedule last year) has allegedly told its fixed income traders their bonuses will be down 75%.
Nor is that punitive when you consider that Morgan Stanley has also said it will be paying everyone earning up to $250k (£163k) in total compensation entirely in cash. Credit Suisse has implemented something similar will be paying everyone earning up to £172k entirely in cash this year. This looks like the start of a trend.
Moreover, for juniors at least, it looks like Morgan Stanley’s bonus deferrals may be moderate: the Financial Times says junior deferral rates at the bank will be capped at just 25% after complaints about the proportions deferred last year.
Morgan Stanley will pay half its cash bonuses in December 2012 and the remainder at the end of 2013. Stock payouts will vest over three years.