Bankers Are the Richest
Investment bankers are still the kings of Wall Street when it comes to bonus time.
Investment bankers can expect their bonuses to increase 25% this year, according to compensation consulting company Johnson Associates. That compares to a 15% increase in bonuses for traders in the equity and fixed-income divisions of Wall Street firms. Executives in prime brokerage groups can also expect a 15% increase in year-end compensation.
This year, large Wall Street firms have become more dependent on trading revenue to boost the firm's quarterly results. But when it comes to bonuses, investment bankers still make out better than traders on a percentage basis. Goldman Sachs (GS), Lehman Brothers (LEH), Merrill Lynch (MER) and Bear Stearns (BSC) all attributed blockbuster second-quarter results to trading at the firms.
Johnson Associates says that the majority of the revenue does come from trading. Fixed-income groups contributed, on average, 34% of the firm's total revenue, and equity divisions brought in 21%. That compares to investment banking revenue, which contributed 13% of the total revenue on average.Meanwhile, professionals at Goldman Sachs, Lehman Brothers and Morgan Stanley are among the highest paid on Wall Street, according to the research. During the first two quarters, more than 50% of Goldman's net revenues went to compensation and benefits. On average, 47% of revenue at investment and commercial banks goes to pay the employees.
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