Given that it typically equals half the revenues at investment banks, cutting compensation is an obvious way to restore some profitability, as Goldman Sachs showed when it beat analyst estimates by dramatically reducing pay.
"Smaller bonuses were inevitable, will continue and should be even smaller," wrote William Cohan, a former JPMorgan Chase (JPM) investment banker who has written books on Bear Stearns, Goldman Sachs and Lazard (LAZ), in an email exchange. "It's the only way these public firms can show profits these days."
-- Written by Dan Freed in New York. Follow this writer on Twitter.
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