Wall $treet Folly

Bonus watch 2008: A new report says they could get nailed

Duh. 

Reuters tells us that a new report out of compensation consultants Johnson Associates indicates that bonuses this year could be pretty slim, contracting from 10 - 25%, and possibly 35% in the executive suite. (We sadly note the obvious -- that if you're unemployed they also could be nonexistent.)

The credit crisis will mostly affect bonuses for workers directly involved in trading and selling assets like subprime mortgage bonds, the report said.

Senior executives will likely face the biggest bonus cuts and may even find their pay linked to risk exposure, the report said. Banks may also implement what the report referred to as "clawbacks" -- managers to pay back compensation money if certain results are not met, the report said.

Contrarian Capital sued by former portfolio manager who claims that his pay and bonus were withheld

Did Jon Bauer and his $4 billion Contrarian Capital "arbitrarily" withhold a former portfolio manager's regular pay as well as his bonus while he was away on leave tending his son who was battling inoperable cancer?  That's what Stephen Czech, employed by Bauer for around five years,  is claiming in a lawsuit filed against Contrarian in state court in Stamford:

Stephen Czech claims that Jonathan Bauer, who runs the roughly $4 billion Contrarian Capital Management in Greenwich, Conn., is withholding Czech's regular base pay and bonus "arbitrarily," according to a lawsuit filed in state court in Stamford.

The teeth of the complaint centers on an approved personal leave of absence that Czech had taken from Jan. 6 to Feb. 16 to seek medical attention for his 11-year-old son, who had been diagnosed with an inoperable brain tumor.

Goldman Sachs: All in, Lloyd Blankfein reaped around $100 million in 2007

The numbers are in, and all in all, Goldman Sachs CEO Lloyd Blankfein didn't do too badly last year compensation-wise given that the firm seemed to have largely dodged the sub-prime bullet.  Turns out when you tally it all up --- his $53.97 million fiscal 2007 package plus the vesting of stock -- that Lloyd took in around $100 million.....

Blankfein also realized $45.76 million from the vesting of stock, bringing his compensation and other awards to about $100 million, according to Goldman's proxy filing with the U.S. Securities and Exchange Commission.

The compensation amount reflects a methodology used by many executive pay consultants. It differs from Goldman's calculation of Blankfein's "approved 2007 compensation" of $68.5 million, which incorporates a $67.9 million "year-end bonus" payable in cash, restricted stock and stock options.

According to the proxy filing, Blankfein was awarded a $600,000 salary, a $26.99 million bonus and $384,157 of other compensation for fiscal 2007, which ended in November.

Blankfein was also granted restricted stock and stock options valued at $26 million as of the December 2006 grant date, the filing shows. Other compensation included $233,053 for a car and driver, and several other items.

Goldman Sachs CEO gets $100 mln in pay, stock - Reuters

Lazard's Bruce Wasserstein banked large with restricted stock worth $102 million

Lazard CEO Bruce Wasserstein didn't do too bad last year, compensation wise.....

Wasserstein, 60, extended his contract for five years and received restricted stock worth $102.1 million at today's closing price. He was also granted a $36.2 million stock bonus for 2007, double the prior year's award, the New York-based company said today in a statement. Profit advanced to $122.6 million, or $1.04 a share, from $85.8 million, or 78 cents, a year earlier.

More stock, less cash: Citigroup is the latest firm to alter its bonus payout plan

We hear more grumbling:  Citigroup is the latest firm to reduce cash compensation in favor of more restricted stock for its most senior bankers.  Up to 20% of the bonus package will instead become restricted stock with 2 year vesting.

The US bank has followed its rivals by reducing the cash element of its bonuses and increasing stock payouts to its highest-paid bankers, who get most of the bonus pool. The banks are trying to ensure the limited cash pool is distributed most heavily to lower paid employees, and asking higher paid bankers to take additional restricted stock.

The cash bonus may be cut by 50% in the case of the highest-paid Citigroup executives, according to a source familiar with the situation.

Citigroup revamps cash bonus packages - Financial News Online

Merrill Lynch plans to change how bonuses are doled out

No more ME! ME! ME! mentality:  John Thain plans to change the bonus measurement process to be based on how the company or business line did rather than how the individual did.

CNBC: Hey Merrill, thanks for that shitty bonus. So here's my gift to you...

So how well did the in-some-cases zero bonuses go over at Merrill Lynch?  A somewhat-in-disbelief -- and laughing -- Charlie Gasparino reported  little while ago that  a Merrill fixed income research employee, believed to be disgruntled over his lack of bonus "relieved himself" "in an inappropriate way" at the firm (we don't know if it was #1 or #2, but the latter made for a more "interesting" visual).   Merrill has apparently poopooed that, spinning it as "an accident in one of the stalls". (Ya, like we believe that one...) "There are a lot of angry people in the Merrill fixed income department...."......

Bonuses: Goldman Sachs defends itself from the report that they had stiffed staffers -- they were paid "appropriately"

Goldman Sachs disputed the New York Post article published on Sunday that claimed that cost center employees were only paid paltry bonuses:

Goldman Sachs Group Inc., the world's most profitable securities firm, said it distributed 2007 bonus payouts ``appropriately'' after a record year, disputing a newspaper report that it shortchanged some workers.

``The story in the New York Post yesterday about what they refer to as `some cost center employees' getting `stiffed' on bonuses is nonsense,'' Lucas van Praag, a spokesman in London, said today. ``We compensate our people based on their performance and the performance of the firm. We had a very strong year and took great care to reward our people appropriately.''

Goldman Says Bonus Payments Rewarded Employees `Appropriately' - Bloomberg

Goldman Sachs back office staffers said to have gotten paltry bonuses

Evem though most of Goldman dodged the sub-prime bullet and generally had a pretty  good 2007,  the winds are whispering that generous bonuses  didn't trickle down to back office types.  Seems like they expected 75% of their salary as a bonus, based on what they got last year.  But they only got a grinchy 15%....

Goldman Sachs: Lloyd Blankfein banks $67.9 million

It may not be the $75 million package first speculated, or even the more recent $70 million guess, but with a record $67.9 million pay package, Lloyd Blankfein still didn't do too badly.

Blankfein, 53, will receive $26.8 million in cash, and $41.1 million in restricted stock and options, the New York- based firm said in a regulatory filing. Co-Presidents Gary Cohn, 47, and Jon Winkelried, 48, will each receive restricted shares and options valued at about $40.5 million, up from $25.7 million last year. Cash payments weren't disclosed for anyone other than Blankfein, who reaped a record-setting $53.4 million last year.

Goldman shattered Wall Street profit records for the fourth-consecutive year even as banks and securities firms including Citigroup Inc. and Merrill Lynch & Co. were forced to take at least $96 billion of writedowns. Goldman set aside $20.2 billion to pay employee salaries, benefits and bonuses, 23 percent more than last year.

``There are successful people and then there's extraordinary success, and they're trying to show as a firm that they're really extraordinary,'' said Jeanne Branthover, managing director of Boyden World Corp., an executive recruiter in New York. ``They're rewarding him for leading such a fabulously successful ship.''

  Goldman Awards Blankfein a Record $67.9 Million Bonus - Bloomberg