2011 Compensation – What Firms Have Told Us So Far (Source: Here In The City News)

After Wall Street firms have posted their worst quarter (Q3) since the beginning of the financial crisis, we have a quick look on how this has impacted comp figures at three of the industry’s top firms.

 

Goldman Sachs

Amount set aside for staff compensation January – September 2011 – $10bn

Down 24% on same period 2010 ($13.1bn)

‘Average’ pay out per employee Jan – Sept 2011 – $292,836

‘Average’ pay out per employee Jan – Sept 2010 – $370,706

The provision for staff pay (fixed plus variable costs – bonuses – and benefits) fell 59% to $1.58bn in the third quarter from $3.83bn in the same period in 2010.

Now, to put that in perspective, that represents just $46,000 in total comp for each of Goldman’s 34,000 employees during the quarter, which would probably barely cover base pay in the period – in other words, little or no bonus accrual in Q3.

The firm’s compensation ratio so far in 2011 is 43%, marginally down on the 44% for the first 9 months of last year.

 

JPMorgan Investment Bank

Expenses set aside for investment banking staff comp (fixed and variable pay and benefits) fell marginally to $7.71bn for the first 9 months of 2011, against $7.88bn for the same period in 2010. Investment banking headcount remained broadly the same Jan-Sept 2011 over 2010 (26,615 against 26,373), although the unit employed 1,101 less staff at the end of the quarter just finished compared to Q2 this year.

The investment bank has allocated 35% of its revenues for comp so far this year, compared to 37% in the same period in 2010.

All in all, that translates to an ‘average’ (and we ALL know there’s really no such thing) of $289,611 per investment banking employee for the year through to the end of September, compared to $298,866 for the same period last year.

 

Morgan Stanley

Staff compensation expenses set aside in the Institutional Securities unit for the period Jan – Sept 2011 – $5.74bn, down 8% on the same period in 2010.

This represents some 38% of revenues, down from 42% in the first 9 months of 2011.

The unit set aside 31% less for staff comp costs in Q3 than it did in Q2.

The ‘average’ employee firmwide came out $202,608 for the 9 months of 2011, up 6% the same period in 2010 ($191,229)

What is interesting, as Dow Jones Newswires  points out, is that the average pay gap between Morgan Stanley and Goldman Sachs has narrowed – it’s now $90,228 (roughly the same as the price of a Mercedes Benz S-Class).

 

Sources – Bloomberg, Dow Jones Newswires, company disclosures