Stock Market's Stagnant Year Means Smaller Bonuses On Wall Street
Workers who routinely track the balances of their 401(k) savings know that 2011 was a pretty dismal year for investing in stocks. The S&P 500, a broad stock index that includes about 75 percent of publicly traded U.S. companies, finished 2011 statistically where it began, meaning many investors ended the year where they started.
As The Wall Street Journal noted on Dec. 30 -- the last trading day of the year: "The entire year has been a wash. A long, painful, horrible wash. This has been like that episode of 'Dallas' when Pam Ewing wakes up to find Bobby in the shower and realizes that the entire season was just one long dream."
And for those who work on Wall Street, it just may be a nightmare. That's because many who work as traders and brokers rely on bonuses for much of their total pay -- and that amount is tied to performance of the stock market.
As the Journal notes Wall Street workers' total compensation is "likely to be the lowest since 2008, when the financial crisis destroyed some firms and left many survivors on government life support."
The 400 partners at Goldman Sachs Group Inc. can expect bonuses that are roughly half what they received in 2010. Those in the firm's fixed-income group can expect a 60 percent cut, and some workers may not receive bonuses at all.
The specter of Wall Street workers taking home smaller bonuses may delight those in the Occupy Wall Street movement, but the average compensation at Goldman is still expected to reach $385,000 per employee.
While significantly lower than the more than $430,000 they earned in 2010, this year's bonus is nothing to sneeze at -- especially when compared to the amount that the average U.S. worker brings in.
As Reuters reported last fall, the median paycheck fell for the third consecutive year in 2010, down 1.2 percent to $26,364. That works out to $507 a week, the lowest level, after adjusting for inflation, since 1999.
At the same, the news agency noted, the number of people making more than $1 million increased by 20 percent compared to 2009.
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David Schepp has spent more than a dozen years covering business news for the electronic and print media, including Dow Jones Newswires, BBC News, Gannett Co., and most recently at AOL's DailyFinance. Nearly 10 years ago, he started writing a weekly People@Work column, looking in depth at issues facing workers in today's workplace. Follow David on Twitter. Email David at email@example.com. Add David to your Google+ circles.more...