WSJ: Bankers lose over $1 billion in bonus value as stocks drop
For bankers, getting a bonus in stock has become an albatross.
Employees at Goldman Sachs Group Inc. GS, -1.86% have been hit with more than $400 million in paper losses thanks to a plunge in the value of stock bonuses paid out early last year, according to a Wall Street Journal analysis.
Similar declines have been felt by advisers, traders and other staff across Wall Street.
J.P. Morgan Chase & Co. JPM, -1.53% , Bank of America Corp. BAC, -2.36% , Citigroup Inc. C, -2.00% and Morgan Stanley MS, -0.78% haven’t yet reported how much stock they granted a year ago as part of employees’ bonuses, but the declines in banks’ share prices--based on their averages from January 2015--have been equally severe, ranging from a 32% drop at Morgan Stanley to a 17% decline at Goldman. (J.P. Morgan, an exception, is up 2%.)
The decrease is providing the first pocketbook test of the new bonus practices banks established in the wake of the 2008 financial crisis. “It’s a big deal,” said Alan Johnson, managing director of pay consultant Johnson Associates. “The business is down, the market is down, the stock is down. It couldn’t come at a worse time.”
If the recent bank-share slump persists, technology firms and other industries may find it easier to recruit bankers away from an industry already battered by its status as a political piñata.
Fewer bankers today are saying, “ ‘Oh, I could never leave here, look how much money I’d be leaving on the table,’ “ said Stacy Stevens, president of recruiting firm Park Avenue Group. The decline may prompt some bankers to “do a little comparison shopping.”
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http://www.marketwatch.com/story/bankers-lose-over-1-billion-in-bonus-value-as-stocks-drop-2016-02-18
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