Many on Wall Street will find the holidays less merry this year thanks to thinner paychecks.
Year-end bonuses, a much beloved perk for many Wall Street employees, are expected to plummet by as much as 40 percent, according to a study by executive search firm Options Group in the Wall Street Journal Monday.
Annual compensation for workers at Wall Street firms could dip by 27 percent to 30 percent, and the areas that will see the biggest drops include currencies, commodities and bond trading, the study showed.
The drop in pay for employees isn’t a function of an industry that’s realized obscene payouts aren’t a good move in the face of public outrage, including Occupy Wall Street’s efforts, said Alastair Smith, a professor of politics at New York University and author of “The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics.”
“It’s exactly the opposite,” he said. “The simple problem is companies haven’t made as much money and that’s the simple reason why they’re not providing big bonuses.”
But there’s no need to make an extra request with Santa on behalf of Wall Street employees, especially traders. Even with the drop in bonuses and overall pay, such positions are still expected to bring in what would be a great present for any other worker. A bond trader who is also a managing director is likely to make about $1.8 million in annual compensation, the Journal story reported and Options Group spokeswoman Jessica Lee confirmed.
Compare that to the average earnings for U.S. employees overall, which was about $795 weekly, or $41,340 a year, according to wage data for October released by the Bureau of Labor Statistics.
Still, employees outside of the gilded Wall Street bubble don’t expect a lot from their bosses when it comes to year-end bonuses.
An employee incentives company Parago surveyed workers about what they they’d be happy with this year when it come to holiday rewards, and nearly 70 percent said they didn’t expect anything. Of those who did want some sort of incentive:
* 84 percent reported that an end-of-year reward of a prepaid card valued at $100 or less would meet their expectations.
* And 55 percent said it would take just a $25 prepaid card to meet their expectations.
“Employees are not expecting rewards this year, but if they received one it would clearly foster positive attitudes and behavior that could help many companies compete in this tough economy,” said Juli Spottiswood, president and CEO of Parago.
