BOSTON (TheStreet) — Profits are up and bonuses are flowing again. Case in point: Goldman Sachs (GS) reported earnings of $13.4 billion for 2009 and said it would spend an average of $498,000 per employee on bonuses.
Stock options hold value once again. Executive perks that were eliminated during the worst of the recession — or hidden from prying eyes — are being flaunted. But will the gravy train make a stop for Wall Street's rank-and-file employees? Will salary and benefit cuts be reversed?
(GS) As the economy slowed, employers cut benefit spending 14% from $21,527 in 2006 to $18,496 in 2007, according to the U.S. Chamber of Commerce. Now, with the worst of the recession in the rearview mirror, benefits are getting a second look. While some employers expect to restore previously curtailed benefits, many companies will be looking for cheaper ways to show they care.
(GS) "We know that employers are paying attention to costs more than ever," says Dr. Ronald Leopold, national medical director for MetLife's (MET) institutional business and a part of the team that compiles its annual survey of attitudes regarding benefits. "What we found in our study was that employers were more apt to hold back in terms of salary and compensation than they necessarily were with benefits."
(GS) (MET) Companies' compensation costs averaged $27.49 per hour worked in 2009, according to the Labor Department. Wages and salaries accounted for 71% of total compensation, while benefits averaged 29%. Employer costs for paid leave (including vacation, holiday, sick, and personal time) averaged $1.86 per hour worked and insurance benefits averaged $2.15 (7.8%). Retirement and costs, which include pension and 401(k) plans, averaged 94 cents (3.4%).