Bonuses on Wall Street will rise by 4 per cent from last year – not counting the impacts of recent legal penalties on some big banks, The Wall Street Journal reported.
The report cited an Options Group study, which predicted the 4 per cent jump across the board, but didn’t account for the legal penalties that companies like Bank of America, BNP Paribas, Citigroup, and Morgan Stanley will have to pay out this year.
Most recently, six banks were fined $US4.3 billion for overlooking foreign exchange market manipulation. Other investigations and negotiations have led to a whopping $US24 billion being paid to the Justice Department this year.
Those penalties will likely come out of employees’ bonus checks – particularly fixed income, currencies, and commodities traders, for whom Options Group expects to see a 1 per cent pay drop.
Stock traders should see a 1 per cent pay increase, but the real winners will be the investment bankers, who should see their total pay rise 9 per cent from last year. (Wealth managers’ pay should jump 7 per cent this year, the report said.)
Other estimates are more extreme. A Johnson Associates study predicted a 15 per cent jump in investment bankers’ pay, while traders’ bonuses would fall by 10 per cent.
Not their regular pay, though. Just their bonuses.