Meet the winners and losers of the upcoming bonus season
If you work in banking and your job involves taking risks with money, you’re likely to end up with a fairly lousy bonus. But other pockets of Wall Street should fare better come bonus season.
Bonuses for fixed income and equities traders could be down as much as 10% this year, according to a new report from compensation consultant Johnson Associates. This comes as little surprise, although traders enjoyed a rather volatile September and October. Activity has subsided yet again in November, though.
The other potential losers include those in the hedge fund industry, which has had a relatively rotten year performance-wise. Fewer than one in five active money managers outperformed the stock market over the last year, according to a separate report. That hasn’t happened in over a decade.
Hedge fund employees could see as much as a 10% dip in their bonuses for 2014, according to Johnson Associates. However, a competing report last week from Glocap said that money managers at hedge funds could see as much as an 8% increase in total compensation, taking into account both salary and bonus.
Despite mediocre performances, hedge funds have successfully raised assets at a near-record clip, so it’s fair to say that pay will be extremely variable throughout the industry.
Meanwhile, the big winners for this year are those working in more stable, client-focused businesses: M&A, private equity, underwriting and asset management. Advisors on initial public offerings and mergers and acquisitions could see a 15% uptick in bonuses for 2014, as could private equity professionals that play in a similar sandbox. Asset managers are looking at a 5% to 10% increase in incentivized comp.
The one key takeaway from the report is that safe, client-focused businesses are hot at big banks – something that likely makes regulators happy. Still, the lure of the buy-side and smaller sell-side boutiques that face fewer rules and regulations has never been stronger.
“For the first time in the last 30 years, the strong perception is that the pay leaders are not the big banks,”Alan Johnson, the managing director of Johnson Associates, told the New York Times. That’s especially true of you’re taking risks with money.
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In the latest hiring roundup, Moelis is growing in Europe, Barclays is adding headcount in Asia and HSBC reveals aggressive risk and compliance plans.
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In a new era of transparency, or perhaps a giving away of a little more information than most financiers would like, the CFA Institute has unveiled a new database that provides the names, telephone numbers, email addresses, locations and job titles of its 112,000 charterholders. We broke down which banks employ the most CFAs.
As part of John Thiel's hippy-style of leadership, as Fox Business’ Charlie Gasparino would call it, Merrill Lynch brokers are being visited by a wellness guru who talks about their acid reflux problems and encourages them to take baths in Epsom salt and weekday naps.
Meanwhile, a separate report indicates that a number of big-name wealth managers have left Merrill in recent weeks, and that Bank of America wants some answers from Thiel on the attrition. No word if it had to do with the guru or acid reflux.
Bankers Fighting For a Good Cause (NY Times)
Thirty bankers, traders and lawyers gloved up and punched each other to raise money for cancer research. People who attended “Haymaker For Hope” got to see two Citigroup employees box each other and a Goldman Sachs employee lose to a film editor. The charity event raised more than $600,000.
The Latest Industry Stealing Banking Talent (The Dodo via Matt Levine)
Here’s a story about a Goldman Sachs programmer-turned-dog sitter. It sounds like he just hangs out and pets dogs all day in his apartment, for $60 a pop. Not a bad gig I guess.
FX Markets Heating Up (Financial News)
Life has been lousy for foreign exchange traders this year with a lack of volatility in the markets. Things are turning around though. The FX markets are hot all of a sudden.
Buzz Around the Office
Honesty Not the Best Policy (UPI)
A Kentucky woman was arrested on methamphetamine charges last week, which is weird because she was wearing a rather inconspicuous “I Heart Crystal Meth” t-shirt.
Quote of the Day: “They’re working on their culture. They only have so many economic bullets they can shoot. They’ve got to make it a better place to work.” – comp consultant Alan Johnson on how banks are competing with the buy-side
