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Banker bonus season expected to be jolly
6-figure salaries pale in comparison to the year-end payouts many are likely to see on Wall Street.
November 29, 2005: 1:41 PM EST

NEW YORK (CNNMoney.com) – It's good to be a banker this year.

Some executive search firms estimate that bonuses for those working at investment banks could be between 5 percent and 10 percent higher than they were last year, the third year in a row for year-over-year bonus increases. The Options Group is even more optimistic. The firm estimates that total compensation this year (salary plus bonus) could increase an average of 15 percent for U.S.-based bankers at the top-tier banks (e.g., Goldman Sachs and Morgan Stanley).

Top performers could see up to 30 percent increases.

Though major stock indexes had been about flat for the year up until the November rally, Andy Serwer of FORTUNE notes that there's been a lot of volatility from which Wall Street profited. And even a spate of corporate bankruptcies offered its share of business to the pinstripe-suit-and-wingtip set.

Based on estimates from executive search firm Nordeman Grimm, Serwer estimates that investment bankers with at least 10 years' experience and a base pay of $250,000 could see bonuses between $2 million and $3 million, if not more.

A report in "New York Magazine," meanwhile, estimates that the total bonus pool at Goldman Sachs, which had a bonanza third quarter, could be as high as $11 billion. Divided by the number of employees working there, that works out to be about $500,000 per employee.

Not everyone at the firm will see that kind of money. "New York" estimates that bonuses could range from $2 million to $40 million for the firm's partners; between $15 million and $20 million for the firm's top-performing traders; from $1.75 million to $3 million for non-partner managing directors; around $95,000 for newly minted MBAs; and up to $18,750 for the firm's top secretaries.

Of course, it's not just bankers who benefit from their outsized bonuses. The tax man cleans up as well. From the income tax on a multimillion-dollar payout to the sales tax paid on high-end toys, federal, state and local tax coffers are likely to feel the love as well.

So, too, luxury retailers and real estate agents eager to accommodate the bankers' material desires.

And maybe even those in line to get holiday tips.  Top of page

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