Citi, BofA to Raise Pay, Too? - Wall Street Journal
Citigroup Inc. and Bank of America Corp. are expected to soon raise base salaries for investment bankers to compensate for limits on annual bonuses, according to people familiar with the matter.
Both are studying a plan that would mimic similar steps unveiled by Morgan Stanley last week, the people said. The compensation overhaul for top earners comes as Wall Street faces criticism for its level of pay in light of the credit crisis.
Banks that have received government assistance are under pressure to lower big payouts and curb risk. However, banks like J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. -- which are both expected to repay their bailout money this year -- aren't considering an increase in base pay, two people familiar with the matter said.....
UBS Will Stick to Market-Level Salaries, Gruebel Tells Staff - Bloomberg
UBS AG, the Swiss bank which received government aid, will stick to a policy of paying market wages after being criticized for raising salaries at its investment bank, Chief Executive Officer Oswald Gruebel told employees.
“We have to pay our employees in line with the market,” Gruebel said in an internal memo to staff yesterday. “We will stick to this stance, even if it is criticized in the emotional debate over salaries.”.....
Twice Shy On Structured Products? - Wall Street Journal
Wall Street burned thousands of investors with so-called structured products that were supposed to provide healthy profits and limit losses. Brokers, hoping investors' memories are short, are pushing these high-fee products again with safety as the big selling point.
Overall, investors purchased $5.9 billion of structured products in last year's fourth quarter, down 75% from 2008's first quarter, according to data provider mtn-i. Sales have started to nudge upward, rising 7% compared to the fourth quarter, though they are still way down from a year ago.
"There's more appetite for them today than we had six months ago," says Lori Heinel, a Citi Private Bank managing director who oversees structured products. But the action now is with the safer kinds, called principal protected notes and return-enhanced notes. They have dethroned once-popular reverse convertibles, bond instruments that last year often posted losses worse than the market's.....
Nomura’s Rating Cut Two Levels to Baa2 by Moody’s - Bloomberg
Nomura Holdings Inc., Japan’s biggest brokerage, had its credit rating cut two levels to Baa2 by Moody’s Investors Service, citing the damage done to its earnings by the global credit crisis.
“Challenges to stabilizing earnings will continue,” Moody’s said in a statement today. The ratings company also noted uncertainty about the integration of Lehman Brothers Holdings Inc. units acquired by Nomura last year.
Nomura now carries the second-lowest investment-grade rating from Moody’s. The company is cutting costs after posting a bigger-than-estimated loss in the quarter ended March 31, in contrast to a return to profit at Goldman Sachs Group Inc. and Bank of America Corp.....
NY pension clips fund of funds stakes to $500 mln - Reuters
New York state's pension fund has cut its so-called fund of funds investments to about $500 million from $5 billion since January 2008, after deciding direct investments were preferable, a spokesman said Tuesday.....
DiNapoli determined after a review that the strategy of investing in 184 funds through 7 fund of funds was "suboptimal" due to redundant investments, unwanted correlations between the funds' results and the stock market's performance, and costly fees, Whalen explained.....
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