(FORTUNE Magazine) – The poor wretches. Those bankers, traders, and analysts on Wall Street who pocket seven-figure bonuses year after year, through good times and bad, are underpaid.

No kidding. Listen to Goldman Sachs's senior partner Jon S. Corzine: "The market for Wall Street professionals is as strong now as we've ever seen it." Goldman and others are being cherry-picked by foreign banks, boutiques, hedge funds, and competitors in search of bankers with the Midas touch.

Last fall, for instance, a newly anointed partner, 36-year-old Kevin J. Conway, stunned the firm when he quit to join leveraged-buyout specialists Clayton Dubilier & Rice. A Goldman partnership was once considered so lucrative-annual bonuses have been reaching $5 million--that no one would consider turning it down. But Clayton Dubilier's partnership sports a compound annual return of more than 50% since 1978, meaning that Conway's take is a sure bet to top a cheesy five mil.

Headhunters are earning their bonuses at the expense of Salomon Brothers, where management's attempt to tie bonuses more closely to profits--the nerve!--started an exodus.

Salomon had the temerity to try to rein in multimillion-dollar bonuses being paid out in lousy years like 1994, when the company lost nearly $400 million. The brain drain includes foreign-exchange trader Hans U. Hufschmid, who split for Long-Term Capital Management, a money manager in Greenwich, Connecticut. Hufschmid banked $20 million in 1993. Alan E. Howard, a specialist in German bond trading, left for the London office of Tokai Bank, based in Nagoya, Japan. Though Howard earned more than $2 million annually in the past few years, his cash compensation at Tokai was reportedly bid up to about $5 million over two years, plus a cut of the profits.

The stampede caused CEO Deryck C. Maughan to scuttle the original plan and roll out a revision at the end of June. Another star promptly left, 42-year-old trader Dennis J. Keegan, who earned about $30 million last year. So Salomon has stopped revising, because the market won't allow it.

Why not? "Foreign banks are using [1994's shrinking bonus pools] as an opportunity to get talent," says Windle B. Priem, executive recruiter for Korn/Ferry International. Union Bank of Switzerland, for example, has hired a host of U.S. bankers and traders to add heft to its UBS Securities unit.

The foreign banks have handed out compensation guarantees to many new recruits, but few of them are expected to be able to perform the alchemy necessary to transform their employers into muscular competitors. That's why the deals are being scorned in some parts of Wall Street as "two years and out" packages. Today's market for stars is no more than "a bubble" that will eventually burst, says Goldman Sachs limited partner Roy C. Smith, a professor at New York University's business school: "Wall Street firms cannot pay out more than they earn indefinitely."

- Linda Grant