Wall Street to pay billions in record compensation: report

Wall Street to pay billions in record compensation: report
AFP
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First Published: Tue, Oct 12 2010. 03 38 PM IST
Updated: Tue, Oct 12 2010. 03 38 PM IST
Washington: Financial institutions on Wall Street are preparing to pay a record $144 billion in compensation and benefits, according to a study published on Tuesday in the Wall Street Journal.
The payout, covering bonuses, premiums and stock options for the firm’s executives and employees, is a 4 % raise over the previous record of $139 billion that was handed over in 2009, said the financial daily.
The study, which covers 35 Wall Street firms - including banks, investment banks, hedge funds and money managing groups -found that 29 of the institutions were also expected to see revenue rise by 3 %, from 433 to 448 billion dollars.
The 2010 profit for the firms of some $61 billion is still a 20 % decline on the $ 82 billion in 2006 - despite in that time compensation at the institutions soared 23 %, according to the Journal.
Wall Street banks and funds have already come under withering criticism for their actions during the 2008 financial crisis and faced the fury of the US public for paying out huge bonuses even though some were propped up by taxpayer funds to keep afloat.
In June US authorities announced guidelines aimed at countering pay and bonus practices blamed for the excessive risk taking that fueled the global financial crisis.
The rules, however, did not prohibit any specific forms of payment for incentive compensation or establish mandatory compensation levels or caps.
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First Published: Tue, Oct 12 2010. 03 38 PM IST