Wall Street pay already isn’t what it once was.
Revenues are plummeting, banks are cutting swathes of staff, and now regulators are taking steps that could mean that bank executives have to wait even longer to get their bonus.
Federal regulators on Thursday proposed new rules that would allow companies up to seven years to clawback executive bonuses. Clawback provisions allow firms to retract bonuses if executives are found to have hurt the company.
The rules would also allow firms to hold back more than half of executives’ pay for four years, rather than the typical three.
The changes apply to more than just investment banks, but they come at a time when Wall Street compensation is already taking a hit thanks to weak earnings performance. At Goldman Sachs, employee compensation and benefits were down 40% in the first quarter, as revenues plunged and the firm replaces senior staff with junior bankers.
The average bonus in the financial industry in New York City dropped 9% last year, according to the New York state comptroller Thomas DiNapoli. The bonus pool was down 6%.