Wall Street’s bonus picture for 2010 is not looking good.
Wall Streeters earned record bonuses of about $35 billion in 2006, and that eased down to about $33 billion in 2007 but dropped precipitously to $17 billion in the calamitous year of 2008. Total bonus compensation rose back to an estimated $20 billion last year and is projected to total about $18 billion this year, The Wall Street Journal reports.
Overall, bonuses could be down 22% to 28% this year, according to executive search firm
Traders on proprietary trading desks are expected to be the hardest hit, with their bonuses falling by half, followed by equity and derivatives traders (-25% to -30%), securitized products (-20% to -25%), commodities (-10%) and high-yield credit (-5%). The only area expected to see a rise in bonuses is information technology, whose bonuses could rise 5%.
Wall Streeters are not taking the news lightly. One Citi executive told The Journal that people coming out of compensation meetings “look like they’ve been hit by a truck.”
Options Group CEO Michael Karp said, “People have been humbled. I don’t think we’ll see the resume their exuberant habits or the wild crazy parties.”
