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With business slumping on Wall Street, the big banks are cutting back big time. Everyone already knows about the layoffs.Now we’re learning more about pay cuts.
Yesterday, the Wall Street Journal reported that pay cuts were coming to Goldman Sachs and Morgan Stanley.
Now, Bloomberg is reporting that cuts are coming to low-level bankers at Credit Suisse and Deutsche Bank. Jeffrey McCracken and Christine Harper report:
Credit Suisse Group AG (CSGN) is likely to suspend its practice, an industry norm, of boosting pay automatically each year for analysts, associates and vice presidents within the investment- banking division, a person with direct knowledge of the decision said. While those employees will get their regular annual salary increases, bonuses probably will be lowered to keep total pay flat from a year earlier, said the person, who requested anonymity because the plan isn’t public.
At Deutsche Bank (DBK) AG, senior executives are evaluating whether to cut or freeze pay for the top tier of vice presidents as a way to pare all junior-banker pay, said a person familiar with the matter…The review of junior-banker pay focuses on investment- banking divisions and not lower-level employees in equity or fixed-income trading departments, the people said.
Deutsche Bank won’t announce internally in North America its bonus and compensation decisions until at least the first week of February, said a person familiar with the matter, who predicted bonuses to be down there 30 per cent to 50 per cent.