Top bankers in Asia ex-Japan at Wall Street’s biggest firms are experiencing their worst payouts since the global financial crisis more than a decade ago, people familiar with the matter said.
On average, the total compensation of managing directors at banks including Goldman Sachs Group Inc, Morgan Stanley and Bank of America Corp has dropped by 40 to 50 percent, with payouts for senior managing directors falling to US$800,000 to US$1.5 million, and for first-year managing directors to US$600,000 to US$1 million, the people said, asking not to be named discussing internal matters.
Star bankers are experiencing milder cuts of 20 percent or less in their compensation after a bumper year in 2021, with a few still taking home about US$2 million. Compensation for nonperformers has fallen 60 to 70 percent, with many being left out all together from the bonus pool.
Photo: Bloomberg
The figures reflect broad trends across major Wall Street firms in Asia, the people said.
Pay might differ for certain product groups and countries.
Global investment banks are pushing hard to keep a lid on costs after increasing their staffing over the past few years in a war for talent and higher inflation. While Asia has been their biggest growth markets for years, job cuts have proliferated and the tough bonus news is expected to help reduce headcount further.
Goldman plans to slash 3,200 jobs globally and has already made two rounds of reductions in Asia since September last year, firing mostly China-focused bankers. Morgan Stanley has also jettisoned bankers focused on China.
Business has been hard hit in China by a regulatory crackdown and the nation’s now abandoned “zero COVID-19” policy. Most dire was a move by Beijing to limit the ability by domestic companies to sell shares overseas, triggering an 88 percent slump in those deals last year. Globally, investment-banking revenue declined about 50 percent last year at the largest lenders.
While some banks had sought to narrow the pay gap among bankers rather than cutting jobs as deals might bounce back in the second half of this year, there could be more rounds of cuts this year, one of the people said.
Managing directors were the hardest hit. Total compensation of directors fell about 30 percent to a range of US$400,000 to US$600,000, while vice presidents were less vulnerable with about a 10 to 15 percent decline from last year, the people said.
The drop is particularly prominent this year for Goldman, which handed out record payouts last year at 20 percent above the market, one of the people said.
Not everyone is seeing a big drop-off in pay. Country teams in Australia and South Korea and those in clean energy, merger and acquisitions have performed better, the people said.
Banks are also keen to retain new, top-performing staff in anticipation of a rebound in deals. Citigroup Inc, for example, is raising compensation for its junior investment bankers by as much as 15 percent.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS