eFC Briefing: Severance Spigot Shut

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Citi shelves severance deals to avoid public ire. Meanwhile, Barclays is adding bankers and researchers in Europe and Asia. Repaying public aid will determine banks' ability to compensate employees at year-end.

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Citigroup has suspended the periodic severance payments it had promised five former top executives, The Wall Street Journal reports. Public officials reportedly didn't demand the halt, but the decision was made with one eye on Washington and the other on the chat boards. Although contractually obligated to make the payments, the bank is "essentially ...wagering that the former executives will conclude that it would be publicly embarrassing for them to file lawsuits," the Journal says.

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Think no one is hiring bankers these days? You haven't been watching Barclays Capital. The London-based powerhouse - never shy about talking up aggressive growth plans (for its U.S. presence either before or since the global crisis erupted - is the subject of a lengthy New York Times story replete with names and numbers. One clear takeaway: Institutions that never tapped government aid are the place to be, or go.

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Wall Street compensation guru Alan Johnson projects significantly larger 2009 bonuses for senior managers (excluding proxy executives), staff professionals, and equities and fixed income professionals. But professionals in other areas of investment banking and asset management will see equally large decreases from depressed 2008 levels, Johnson Associates projects from its analysis of the largest institutions' first-quarter results.

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Citi and Bank of America reportedly plan to raise investment bankers' salaries, after Morgan Stanley unveiled a similar move last week. The steps could foreshadow a bifurcation in Wall Street compensation structures, with banks that remain on public assistance shifting pay from variable bonuses toward higher fixed salaries, while those financially strong enough to return taxpayer aid may stick with the traditional bonus system.

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Crain's New York Business argues Wall Street job losses have been exaggerated. Citing recent data from the New York Department of Labor, the newspaper says only 19,000 financial services jobs have disappeared from the Big Apple since August 2008. Among possible explanations: severance packages doled out week-by-week instead of all at once, TARP and other taxpayer-funded rescue deals, foreign banks and boutiques scooping up U.S. banks' castoff talent, and the officially reported numbers perhaps lagging far behind the reality on the Street.

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A Philadelphia Inquirer column details the saga of a former insurance executive turned financial advisor who approached more than 4,000 decision-makers and potential contacts without getting even one interview for his efforts in the 10 months since his layoff. Dissecting his methods, eFinancialCareers News distills a number of lessons: Don't gauge an opportunity today against the status you held in days gone by. Don't contact people indiscriminately, do your homework, avoid rigidity and a feeling of entitlement. And if you find yourself going around in circles after a few months, spring for a career coach.

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