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Bonuses and redundancies: the latest revelations
18 January 2008
JPMorgan
Dimon’s darlings may have delivered net income of $3.1bn for the investment bank in 2007 while all else (except Goldman Sachs) fell apart, but they won’t be paid anything extra for their efforts.
The bank’s 4Q results reveal that 148 of their number were culled between October and January, while average total compensation per JPMorgan investment banker declined nearly 10% to $312k (£158k). This is less than the average at Morgan Stanley ($343k), whose bankers did considerably worse.
Citigroup
Citigroup’s investment banking and markets bankers lost $5.3bn in 2007 and received a more-deserved fiscal spanking as a result – compensation and benefits expenditure for their business also fell nearly 10%.
Citi doesn’t divulge precisely how many people it employs in its ‘markets and banking’ business, but a spokesperson in New York tells us it’s around 65,000. This makes the average pay package just $162k.
There was some good news for Citigroup bankers, however – new boss Vikram Pandit didn’t reveal plans to eliminate 30,000 employees as predicted, but did (according to Bloomberg) report that cuts of 17,500 were a ‘down payment’ on things to come.
Merrill Lynch
Merrill outdid even Citigroup and achieved a net loss for continuing operations of $8.6bn.
Little surprise, therefore, that the total comp bill fell nearly 6% on 2006, even while employee numbers for the year rose more than 14%. As a result, average total compensation per Merrill employee (brokers included) fell around 20% to $247k and Thain's quoted in the FT today as saying bonus payouts were a '60-40' mix of stock and cash (that's 60% stock, naturally).
John Thain had some good news for Merrill’s bankers, however. Merrill may have added 8,000 new people over 2007, but it won’t be rushing to get rid of them all at once. Thain reputedly said, “This is not a case where, you know, we are targeting thousands and thousands of people [for redundancy],” according to the Wall Street Journal.
Bank of America, Credit Suisse and Deutsche Bank
Neither B of A, Credit Suisse, nor DB announced their results this week, but each felt the need to announce redundancies all the same. Bank of America is getting rid of 650 people, according to Reuters, Credit Suisse announced 150 redundancies from its London securities arm, and Deutsche Bank is cutting 300 people from its global markets arm, some of whom will be in London, according to the Times.
Dresdner, meanwhile, quietly got rid of two people from algorithmic trading.
Whats your offer mate ?
Get a job or die trying 25 Jan 2008
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