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Monday’s Headlines: Wall Street 2012 Bonus Picture May Not Be as Bright as Previously Predicted?

"Whoa, what’s going on here? One CNN Money headline claims, “Slightly larger bonus checks expected on Wall Street.” Meanwhile, Investment News warns: “Wall Street bonuses hit the skids.”

Incidentally, both stories cite the same report from compensation consultancy Johnson Associates. Turns out, it’s all in how you spin the figures.

CNN reports that top employees and executives can expect to see 2012 bonuses of 10 percent this year, citing the Johnson report. Meanwhile, investment bankers – especially those in M&A – can expect paycheck cuts of 10 percent, the network wrote.

It appears Investment News took a more dour spin on Johnson’s reporting – saying that the five biggest Wall Street firms’ top employees will see a more modest raise.

“Incentive pay for senior management, excluding the executives named on proxy filings, will be unchanged to 10 percent higher, Johnson Associates estimated in an Aug. 14 report. That’s down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent,” Investment News writes. It goes on to report that the biggest pay increases will be for fixed income at jumps of 10 percent to 20 percent instead of the 15 percent to 25 percent previously predicted.

CNN concedes: “Even if bonuses edge up this year, they will be down roughly 40 percent from 2007 levels … Many big banks are also busy cutting staff. So any pay raises will likely be accompanied by more layoffs too.”


Other News:

Financial firms may cut 3,000 jobs in London this year, as jobs are added in New York. [Bloomberg]

CME is planning a European derivatives exchange in London. [DealBook]

Despite a high-profile June launch, direct yuan-yen foreign exchange dealing has yet to catch on. [WSJ]

More new hedge funds started in the first quarter of this year than in any quarter since 2007. [NY Times]

J.P. Morgan tapped former Exxon CEO Lee Raymond to head the board investigation of the London Whale fiasco. [WSJ]

Asian firms snap up European bank assets. [Reuters]

Australia & New Zealand Banking Group posted a 10 percent profit increase for the first nine months of the year on Asia exposure. [WSJ]

AUTHOREmma Johnson Insider Comment

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