Wall Street pay set for big drop

@CNNMoney November 29, 2011: 3:08 PM ET
A new survey says pay on Wall Street and elsewhere in the financial sector will drop nearly 30% this year, the lowest levels since 2008.

Finance professionals worldwide will face steep pay cuts this year.

NEW YORK (CNNMoney) -- Finance professionals' pay is set to drop this year to the lowest levels since 2008, the peak of the global economic crisis, according to a report released Tuesday.

The pain will be felt worldwide, as compensation in the sector is set to decline 27% this year in the United States, Europe, the Middle East and Africa, the Options Group consulting firm said. Pay will drop 18% in Japan and 19% in the rest of Asia, though just 1% in Latin America.

Taking the biggest hit will be staffers in fixed income, currencies and commodities, whose compensation is forecasted to decline 33%. Those in equities face a 29% drop ,while those working in investment banking will see a 14% decline. Wealth management and electronic trading workers will see slight pay increases.

Year-end bonuses, which constitute a large portion of take-home pay for many finance professionals, will decline between 20% and 30% on Wall Street this year, according to compensation consulting firm Johnson Associates.

"The lack of economic recovery, combined with ongoing uncertainty in the world markets, and global and regional regulation are driving most financial services firms to significantly reduce the size of their bonus pools," Johnson Associates managing director Alan Johnson said in a statement earlier this month.

Finally, finance bonuses return to earth

While the declines are steep, those facing pay cuts should at least be thankful that they still have their jobs.

The financial services industry has lost more than 200,000 jobs globally this year, according to data compiled by Bloomberg. Bank of America (BAC, Fortune 500) alone has announced plans to cut 30,000 employees over the next several years.

Firms are finding other ways to control costs as well, as multi-year contracts are becoming rarer and senior executives are taking on greater responsibilities for less pay, Options Group said.

Looking ahead, Johnson Associates said bonuses should bounce back by about 15% next year, with additional hiring in emerging markets but further cutbacks in the United States. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.