Lauren's Feed
Oct 19, 2012
via Unstructured Finance

Wall Street pay: Headed up or down?

It was a good third quarter for Wall Street profits and an even better one for employees: Goldman Sachs and Morgan Stanley set aside another $7.6 billion in compensation during the period, with year-to-date pay for the average employee up 15 percent at Goldman and 3 percent at Morgan Stanley.

Total comp accruals for both firms so far this year are up to $23 billion, 2 percent higher than the amount set aside a year ago. That equates to or 47 percent of adjusted net revenue, down from 50 percent for the first nine months of 2011, but still much higher than the pay levels some shareholders are demanding.

Oct 18, 2012

Morgan Stanley adjusted profit rises on bond trading

Oct 18 (Reuters) – Morgan Stanley reported
better-than-expected adjusted quarterly earnings on Thursday as
it boosted revenue from trading bonds, long a sore spot for the
investment bank.

The bank’s debt ratings were downgraded over the summer to
three steps above junk. The cut was smaller than many observers
had feared, and Morgan Stanley’s trading business picked up
steam in the third quarter after sagging ahead of the downgrade,
Chief Financial Officer Ruth Porat said.

Oct 18, 2012

Morgan Stanley trading clients came back in third quarter: CFO

By Lauren Tara LaCapra

(Reuters) – Morgan Stanley’s trading business improved more from increased client activity than asset value gains in the third quarter as clients returned after the fallout from the bank’s bond-rating downgrade last summer, Chief Financial Officer Ruth Porat said on Thursday.

“Clients re-engaged and continued to re-engage throughout the quarter,” Porat told Reuters in an interview.

Oct 18, 2012

Morgan Stanley posts higher adjusted earnings

Oct 18 (Reuters) – Morgan Stanley on Thursday
reported better-than-expected adjusted earnings for the third
quarter as it boosted revenue from trading bonds, long a sore
spot for the investment bank.

Income from continuing operations totaled $561 million, or
28 cents per share, compared with $64 million, or 2 cents per
share, a year earlier.

Oct 16, 2012

Goldman takes less risk, executives strike cautious tone

By Lauren Tara LaCapra

(Reuters) – Goldman Sachs Group Inc (GS.N: Quote, Profile, Research) took less risk and earned less money from customers’ trading last quarter, even as the Wall Street bank reaped big gains from the rising values of its stock and bond investments.

The bank’s executives struck a cautious tone on a conference call with analysts, saying that events such as the U.S. presidential election and the European debt crisis will continue to weigh on earnings in the coming quarters.

Oct 16, 2012

Goldman Sach’s investment gains lead to profit beat

By Lauren Tara LaCapra

(Reuters) – Goldman Sachs Group Inc reported higher-than-expected quarterly earnings on Tuesday as revenue more than doubled on big gains in stocks and bonds that the Wall Street bank holds as investments.

However, return on equity – a measure of how the company wrings profit from its balance sheet – remained in a single-digit percentage range, and investment banking and trading results showed signs of weak client activity.

Oct 12, 2012

JPMorgan cuts banker pay, a sign of more frugal times on Wall Street

By Lauren Tara LaCapra

(Reuters) – JPMorgan Chase & Co’s (JPM.N: Quote, Profile, Research, Stock Buzz) investment bank set aside less revenue to pay employees last quarter, another sign that Wall Street bonuses are on the decline this year.

The investment bank put aside $2.07 billion for pay in the third quarter, or 32 percent of net revenue excluding a special accounting charge. That’s down from 41 percent a year ago.

Oct 5, 2012

Big funds seek to rein in pay at Wall Street banks

By Lauren Tara LaCapra and Dan Wilchins

(Reuters) – The days when Wall Street banks could blithely hand out half their revenue in compensation to their staff without a murmur from shareholders have come to an end.

In an era of leaner times and tighter regulation, big mutual funds and pensions are growing more vocal in pushing executives at investment banks to rein in pay and bonuses and consider more staff cuts. Investors worry that bank employees are getting too big a piece of a shrinking pie, leaving shareholders a much smaller slice.

Oct 4, 2012

Analysis: Big funds seek to rein in pay at Wall Street banks

By Lauren Tara LaCapra and Dan Wilchins

(Reuters) – The days when Wall Street banks could blithely hand out half their revenue in compensation to their staff without a murmur from shareholders have come to an end.

In an era of leaner times and tighter regulation, big mutual funds and pensions are growing more vocal in pushing executives at investment banks to rein in pay and bonuses and consider more staff cuts. Investors worry that bank employees are getting too big a piece of a shrinking pie, leaving shareholders a much smaller slice.

Sep 19, 2012
via Unstructured Finance

The new Goldman way: Less cushy compensation?

By Lauren Tara LaCapra

On a conference call to discuss Goldman Sachs’ new chief financial officer yesterday, an analyst asked departing CFO David Viniar why he was leaving when the stock is at a historic low.

Viniar avoided the question by joking that his successor, Harvey Schwartz, would trump that performance. But some investors think they have a better way to fix Goldman’s stock slump: cut back further on comp.