The three New York-based firms will likely set aside US$49.5 billion for compensation for the full year, showed estimates from David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller in New York. That’s up from US$30.9 billion last year and US$44.7 billion in 2007.
The rise in compensation is led by Goldman Sachs, which had record profit in the second quarter. Its compensation expense is expected to more than double from last year to US$21.9 billion, or about US$691,000 per employee, according to Trone’s estimates. The expense at JPMorgan’s investment bank is expected to jump 55 percent to US$12 billion, about US$482,400 for each employee, while Morgan Stanley’s compensation cost will rise 27 percent to US$15.6 billion, or US$252,000.
Year-end bonuses usually account for about 60 percent of compensation, the Options Group report said. While the total this year is expected to be greater than in 2007, it will come to less per employee than the US$256,000 paid out that year by the three firms because of increased staffing.
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