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November 07, 2006

Wall Street Bonuses $50 million?

posted by MR WAVETHEORY at 11/07/2006 07:36:00 PM
The Times says that managing directors can expect a few million in bonuses.

The average managing director at a top Wall Street bank is expected to take home a bonus of $1.7 million this year, up from about $1.2 million last year. The range of managing director total compensation, according to Mr. Johnson, is $1.7 million to $2.3 million. While those may seem stately sums to many, it puts those executives back where they started before the technology bubble burst and their pay tumbled nearly 50 percent.

How much do the top traders make? 10% of the money they make for their firm or $50 million.

Traders, in comparison, can make extraordinary sums because they use the bank’s capital to make bets, allowing them to take big risks that either result in big rewards or gigantic headaches. Traders can make 5 percent to 10 percent of what they earn. For example, a trader who makes $500 million for the bank might take home $50 million.

How much do the grunts, associates, and analysts make?

First-year associates, those just out of business school, can expect a range of $200,000 to $270,000 in total compensation — base pay, bonus and long-term compensation — while a first-year analyst, just out of college, can expect to make $105,000 to $145,000. Guarantees — contracts which promise to pay bankers a fixed amount for a certain number of years — are back, but only one- and two-year contracts, Mr. Johnson said. At the height of the technology boom, three-year guarantees were commonplace.

Not bad.

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