Wall Street Bonuses Cut

Cue the violins and grab your handkerchiefs: Wall Street is facing another year of lackluster lucre. Almost 20 percent of financial-services employees around the world won’t get yearend bonuses, according to Options Group, an executive-search company that advises banks on pay. Those who do collect bonuses may see payouts unchanged from last year or increased 10 percent or less, compensation consultant Johnson Associates estimates. Executives “won’t have to pay up because they’re saying, ‘Where are these guys going to go?’ ” says Michael Karp, chief executive officer of Options Group. “We’re in an environment where a lot of people are just happy to have a job.”

Wall Street banks are trying to deflate pay expectations to avoid a replay of last year, when bonus cutbacks and deferrals surprised bankers and traders, hurting morale and leading to a lot of grumbling. “It’ll never be a nonevent, but if you can take the surprise out and allow people to say, ‘Yeah, that’s within 5 percent of what I expected,’ it becomes less distracting,” says Robert Dicks, a principal at Deloitte Consulting who focuses on compensation and benefits. “It means less hallway chatter and ultimately more productivity.”