BOSTON, Jan 17 (Reuters) – In the past few days, major
global banks have taken the axe to pay with unusual zeal.
JPMorgan Chase & Co slashed the compensation of CEO
Jamie Dimon, one of the world’s top bankers, by half despite
record earnings in 2012. His crime? Being in charge when an
investment unit ran amok with the botched “London whale”
derivative trades that cost the bank more than $6.2 billion.
By Lauren Tara LaCapra
(Reuters) – Top executives at Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) have been considering deep cuts to staffing levels and pay for at least two years, but feared too many layoffs would leave the firm unprepared for an eventual pickup in business, people familiar with the bank said.
They instead chipped away at staff levels and focused on non-personnel expenses that are less painful to cut.
By Lauren Tara LaCapra
(Reuters) – Goldman Sachs Group Inc paid a smaller portion of its revenue to employees in 2012 as it laid off staff, signaling that management at the top Wall Street bank may be ceding power to the shareholders who supply the capital.
The bank set aside just 37.9 percent of its 2012 revenue for compensation, the second-lowest proportion since Goldman went public in 1999. But pay per employee rose because revenue was up and layoffs reduced staffing levels.
NEW YORK (Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) is deferring the payout of all bonuses for the recently ended 2012 year for high-earning employees, three sources familiar with the situation said on Tuesday.
The deferral applies to all employees, except for financial advisers, who make more than $350,000 annually and whose bonuses are at least $50,000, one of the sources said.
NEW YORK, Jan 15 (Reuters) – Morgan Stanley is
deferring the payout of all bonuses for the recently ended 2012
year for high-earning employees, three sources familiar with the
situation said on Tuesday.
The deferral applies to all employees, except for financial
advisers, who make more than $350,000 annually and whose bonuses
are at least $50,000, one of the sources said.
(Reuters) – In 2004, Harvey Schwartz, who was then head of the financing business at Goldman Sachs Group Inc’s investment bank, came up with a new way for the bank to make money from a seemingly mundane activity: helping companies buy back their shares.
He created a product that could save companies money by getting them improved pricing on buybacks while generating fees and trading profits for the bank. To build what became a multibillion-dollar market, Schwartz had to convince dozens of skeptical Goldman sales people, derivatives traders, corporate finance specialists and lawyers that they could make buybacks more enticing, said Martin Chavez, a Goldman quantitative analyst who worked with Schwartz.
Jan 11 (Reuters) – As Wall Street banks begin reporting
earnings next week, analysts and investors are once again
prepared for big accounting charges related to changes in the
firms’ own credit spreads.
The charges stem from the improving corporate bond markets.
When bonds that banks have issued become more valuable, banks
take charges known as “debt valuation adjustments,” or DVAs, to
reflect the fact that buying back debt would be more expensive.
When their bonds weaken, banks can record gains.
Jan 11 (Reuters) – Goldman Sachs Group Inc’s
investment-management arm is telling clients that the best place
to put their money this year is in stocks of U.S. banks, even
after their recent run-up.
At the same time, Goldman Sachs’ wealth management arm is
advising investors looking for higher returns to shun U.S.
Treasuries, most other bonds and even hedge funds, warning that
most hedge funds will generate only mid-single-digit returns.
Jan 9 (Reuters) – Morgan Stanley plans to slash 1,600
jobs in what may be just the beginning of a new round of layoffs
at large investment banks, this time driven by a deeper
reassessment of Wall Street businesses in the face of new
regulations and capital standards.
Morgan Stanley, the sixth-largest U.S. bank by assets, plans
to begin letting go of the employees, many of whom work in its
securities unit, starting this week, two people familiar with
the matter said on Wednesday.
By Lauren Tara LaCapra
(Reuters) – Morgan Stanley (MS.N: Quote, Profile, Research) plans to cut 1,600 employees starting this week, two people familiar with the matter said on Wednesday, in the latest sign of a pullback on Wall Street as revenue from trading and deal-making remains in the doldrums.
The staff reduction pertains to Morgan Stanley’s institutional securities unit – which includes sales, trading and investment banking, and whose staff will be reduced 6 percent – as well as related support staff who work in areas like technology, said the sources, who were not authorized to speak publicly about the matter.