Wachovia investment bank employees reportedly will receive 2008 bonuses averaging between 3 percent and 10 percent of 2007 levels. If true, the report would likely signal a decision by new parent Wells Fargo to stay out of the volatile investment banking business.
Wells Fargo shareholders will vote Tuesday on its deal to acquire Wachovia.
TheStreet.com reports that an unidentified manager in Wachovia's investment banking unit said the 4,600 employees in that division will see their bonuses cut at least 90 percent compared with 2007. But recruiter Rolfe "Rik" Kopelan of Capstone Partnership told the online publication that his sources at Wachovia later said the average bonus is being cut even more, to 3 percent - 5 percent of last year's level.
Those rates could generate very high attrition among Wachovia I-bankers - which might be just what Wells Fargo management wants. It's held its head high in the current downturn, in large part by avoiding the investment banking business.
Wachovia responded with a statement that "discretionary incentive plans for 2008 will pay an average of 20 percent of incentive targets, with differentiation based on performance."