eFC Briefing: Bonus Damage Builds

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Wall Street will accelerate layoffs this year, shrink severance packages and retention efforts, and defer more pay, according to the second-quarter report from influential compensation consultant Johnson Associates. As for bonus expectations, they'll melt further if asset write-downs exceed current projections. A "crescendo of layoffs is expected as firms acknowledge select business reductions may be permanent," the report says. In turn, Johnson sees cost-cutting leading to smaller severance packages and less concern about employee retention.

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Fortress Investment Group granted star macro hedge fund manager Adam Levinson 31 million shares of the publicly traded firm, valued at $300 million. The grant places Levinson among five other executives who together hold a controlling interest in Fortress, says The Wall Street Journal. The arrangement is meant to induce him to stay aboard instead of eventually bolting to start his own company.

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Societe Generale fired a four-member merger arbitrage trading team in New York, apparently in response to declining merger activity, according to Bloomberg News. The team was led by managing director William Kavaler, who had headed U.S. risk arbitrage at Commerzbank and previously worked at Laterman & Co. The group had invested SocGen's own capital and reportedly was breaking even since the beginning of the year.

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Chicago investment firms like Mesirow Financial are in a recruiting mode, reports the Chicago Tribune . Mesirow is talking with more than 30 financial professionals, seeking to hire traders, bankers and investment managers. While bulge-bracket institutions cut heads, employment has held firm in Chicago's trading community, which has benefited from technology-based companies exploiting opportunities fueled by the futures and options exchanges.

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HSBC Securities hired Evan Hazell, a top energy investment banker from Citigroup, to be a managing director in its Calgary office, reports the Globe and Mail. He is one of several additions at HSBC, which has used cutbacks at other firms to strengthen its team.

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New York's attorneys have long commanded the highest salaries in the country for their profession, but a recent survey indicates the rest of the pack may be catching up. According to the American Lawyer's AM Law 100 survey, salaries for mid-level associates in New York were flat in 2007, while their colleagues in Boston and Chicago saw pay increases, reaching the national median of $230,000. Still, none of those locations could match the bonuses doled out to New York attorneys. A typical fifth-year associate in New York could earn a bonus of about $80,000. In Boston, the range is from about $47,000 to $75,000.

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