NEW YORK (
) - The death of Wall Street has been greatly exaggerated.
have posted weak trading results.
True, we are seeing some high level departures from the likes of Goldman, which recently lost two of the four co-heads of its securities business, and
which announced the retirement of vice chairman Walid Chammah this week.
. Though here the headline is somewhat misleading. A careful reading of
The Wall Street Journal
's report of this news indicates that, in addition to stock options, the cash bonus above $125,000 is deferred for a year or two.
So it's not $125,000 is cash and the rest in stock. A banker earning $1 million in cash in 2011 would get $125,000 is cash this year, and about $440,000 annually over the next two years--and that's just for 2011. Still a lot better deal than the vast majority of Americans can count on.
Demand for certain skills, particularly fixed income trading, is down sharply from boom times, and John Rogan, head of the global banking & markets practice at executive recruiting firm Russell Reynolds, believes the fixed income market will be "structurally changed for a long time if not permanently."
However, executives who can help a hedge fund or private equity firm bring in new money or assist a big bank in attracting and maintaining large institutional clients are still very much in demand, Rogan says.
Boosted by record activity in Latin America, a "brilliant" year in Asia and "strong" activity in the U.S. and Europe, the global banking and markets practice at Russell Reynolds had its second best year ever, outpaced only by 2006, Rogan says.
This is astonishing news to Michael Driscoll, an Adelphi University finance professor who spent 28 years at Wall Street, including as a senior managing director at Bear Stearns.
Driscoll's perspective may be particularly dire because he was an equities trader, and that business has been decimated. Citigroup's equities trading revenues, for example, were down 70% for the second straight year.
"I still know an awful lot of people that are employed in the industry. Those that still have jobs are being paid so much less, and I talk to people every single week that are just losing jobs," he says.
The financial sector lost 63,624 jobs last year, more than any other sector other than government, according to John Challenger, founder of Challenger, Gray & Christmas, which calls itself the nation's first outplacement firm. Challenger says that while many employees rejoin the financial sector, others find their skills adaptable to other sectors. An accountant at a bank, for example, becomes an accountant for a healthcare company. A salesperson moves on to selling other products in other industries.
As for those who have yet to enter the workforce, it is not so clear that dreams of making big bucks on Wall Street have been extinguished.
The Occupy Wall Street movement appears to have caused a few students at Williams College, alma mater of JPMorgan vice chairman
and at other colleges around the country to think twice about whether to seek jobs on Wall Street, according to Robin Meyer, director of recruiting at Williams. Still, Meyer isn't sure whether it will have a big impact on the overall numbers in what she describes as "a very active recruiting year."
"There is definitely student interest," in investment banking, she says.
Working 80 to 90 hour weeks for $600,000 may seem less appealing than working those same hours and earning $1 million, but both numbers are still well out of reach for the vast majority of American workers.
"Wall Street is not most Americans," counters trader-turned-professor Driscoll. "Is an investment banker going to work 90 hour weeks for $600,000? In a lot of cases probably not."
But what is the alternative?
"That's the thing," says Driscoll. "Do we all become academics? I don't know what the answer is."
Written by Dan Freed in New York
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