After the financial crisis, the pay of Wall Street bankers went from stratospheric levels to something slightly lower than that — tropospheric, I guess. Bankers, deprived of their huge bonuses, were forced to make do with some downgrades — a Benz instead of a Bentley, the Hamptons Jitney instead of a helicopter.
Luckily, at least one Wall Street pay consultant says that bonuses are (slowly) coming back. Alan Johnson, who serves as a pay Svengali at many of the major banks, is out with a report that predicts that this year’s incentive pay in the financial sector will experience “moderately positive” growth over last year’s levels.
Johnson cautions that since the year is less than half over, it’s hard to tell what the final bonus tallies will be. But he cites a stock-market rally, along with the improved bank earnings, as reason to hope for the best. “Varying strength of economic recovery and geographic impact of regulation, business mix and cost management, and ongoing uncertainty in world markets are key 2013 incentive drivers,” he writes.
Here’s the chart Johnson provides:
I wish the x-axis on that chart went back before 2008 so we could put the gains projected for this year in the context of pay levels before the financial crisis. And I wish the y-axis represented absolute pay levels, not percentage gains and losses. Still, the thing that sticks out is that the pay trend lines for investment banking and asset management are converging again after a pretty big dislocation in 2009. It’s maybe another sign that increased regulatory scrutiny and weak bank performance have made the financial sector appreciably more boring as a place to work and earn money. Those bankers hoping for a 2007-style windfall might have to wait a little longer.