Even with all of the
trash talking about bankers' bonuses, more than a third of Wall Street finance professionals expect their 2009 bonuses to increase, an eFinancialCareers study indicated, according to
Bloomberg.
Really? Really.
"About 36% of the 1,074 people who responded to the e-mailed poll said they are anticipating a bigger annual payout from their companies and 11% said it will jump by at least half," the report stated.
The truth is that chances are many bankers will see an increase in compensation from last year since many of them
faced layoffs, were laid off or received very low bonuses as banks took big losses during the credit crisis in 2007 and 2008.
The Charlotte Observer offered some examples of why bankers are likely to see better bonuses this year:
- Wachovia's
top executives didn't receive bonuses in 2007 or 2008, and investment bankers bonuses were slashed those years.
- Bank of America Corp. (NYSE:BAC) executives received bonuses in 2007 but not 2008. Incentive payments were reduced by 60% in 2008.
Additionally, for many banks, revenue has stabilized, and banks anticipate raking in more fees from the increase in M&A activity, which is why banks like Goldman Sachs Group Inc. (NYSE:GS) have set aside more in compensation than they did last year. So bankers' bonuses are likely to look better -- even if the bonuses come in the form of stock options rather than cash. And for many bankers, anything is an improvement over last year. - Maria Woehr
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If the companies have improved performance during the year than increasing compensation makes sense. Everyone that performs well on the job feels they should be compensated for their performance.