When Goldman Sachs, JPMorgan and other top-tier institutions slashed compensation-to-revenue ratios for 2009, many observers concluded employees would suffer. However, headlines Thursday suggest employers are giving back with one hand what they took away with the other.
Hefty salary hikes, concessionary loans and not-so-restricted share grants are among the tools companies are using to offset the impact of bonus payouts composed of less cash and more stock.
The Wall Street Journal reports:
Bank of America Corp. and Citigroup Inc. are doling out shares that employees can sell within months - much sooner than normally allowed. Other giant banks, including Goldman Sachs Group Inc. and Royal Bank of Scotland Group PLC, let certain employees borrow money to relieve personal cash crunches. And some U.K. banks have considered raising base, or cash salaries - funds that won't be subject to the country's new 50% tax on bonuses.
Separately, ClusterStock reports that Goldman employeesfrom analysts to partner MDs received "very welcome news" about their individual bonus amounts Tuesday. Partners weren't troubled that 60 percent of their 2009 bonuses will be in stock that vests over three years.
At the VP level and below, many Goldman employees received larger bonuses than in 2007, the bank's record payout year. Salary hikes of up to 50 percent further sweetened the news: "I like the new structure even better. My monthly take home just went way up," one employee told ClusterStock.
Banks See Ways Past Pay Limits [WSJ]
Bonus Watch 2010: Goldman Sachs Pays Huge Bonuses And Gives Junior Bankers A 50% Salary Raise [ClusterStock]
BofA Merrill Bankers Set to Receive Early-Vesting Stock Payments [Financial News]
BofA's Moynihan Gets a 19 Percent Raise [WSJ]
Davos Is Closest Most London Bankers Will Get to Swiss Move [Bloomberg News]
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