eFC Briefing: Enjoy It While You Can

Bonus damage appears less severe than feared, an eFC survey suggests. But recipients still aren't satisfied. Meanwhile, an academic study suggests financial professionals' pay is poised to stagnate compared with other industries - for a decade or longer.

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Nearly four in five eFinancialCareers users surveyed this month said they received a year-end bonus. That's a higher proportion than the two-thirds who anticipated getting a bonus in a similar poll last October. Thirty-six percent said they received as much or more than a year ago - exactly matching the proportion that anticipated a larger bonus in the October survey. And one in five reported a double-digit bonus gain, better than the 16 percent who had anticipated such a bounty three months ago. Still, 46 percent were unsatisfied with their bonus.

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Two economists from New York University and the University of Virginia predict financial workers' high compensation will converge toward the levels of other professionals. In a paper for the National Bureau of Economic Research, they see less demand for financial analysis and talent who can spur "financial innovation" as regulation increases and economic changes wrought by the technology industry become less dramatic. Separately, New York State labor market analyst James P. Brown elaborated on the pair's conclusions in a talk last week. Bankers' pay is set to stagnate compared with other professions over the next decade and possibly far longer, Brown warned.

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Mergis Group, a nationwide recruiting firm, launched a "TARP and Government Bailout Talent Delivery Team" to help companies fill slots associated with the U.S. government's bank bailout and other stimulus programs. Brendan Courtney, Mergis senior vice president, leads the team of investment banking, legal and government executives whose sole focus is developing and servicing TARP and government stimulus program-related business.

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The financial crisis and recession will stimulate both fraud and employers' efforts to combat it. That spells danger as well as opportunity for financial professionals, says fraud expert Ralph M. Fatigate of BDO Seidman's consulting division. Candidates may have to jump through additional hoops to convince an employer they have nothing to hide.

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State Street Corp., long one of Boston's most stable financial employers, has been cutting staff as the economy faltered. Now it's facing further trouble after write-downs erased most of its profit last quarter and it disclosed an additional $9.1 billion in unrealized losses. Facing a possible need to raise capital, the bank might have to go beyond the 1,600 and 1,800 job cuts announced Dec. 3.

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The trials and tribulations of Bank of America/Merrill Lynch management isn't doing a lot for the firms efforts to keep Merrill's vaunted force of financial advisors on board. As rivals big and small dangle rich compensation packages in front of them (some nearly triple what BofA is offering, says the New York Post), infighting and bad press is causing even those brokers who are inclined to stay to weigh their options critically. John Thain, abruptly forced out of BofA, spent $1.2 million of Merrill Lynch's money to renovate his Manhattan office - just as he was getting ready to cut Merrill's expenses. This week, the outsted executive admitted his lavish office was "a mistake" and agreed to reimburse his former employer.