As Wall Street faces one other year of sluggish dealmaking, top brass are hoping one other disappointing bonus season will push low performers out the door.
After hiring employees in droves in the course of the pandemic to process a giant flurry of deals, financial firms are now struggling to shed extra staff. Some like Citigroup are enacting aggressive cuts while Goldman Sachs has reinstated an annual culling ritual.
But still others – who are aiming to take a gentler approach – are hoping a nasty bonus shall be enough to encourage a banker to pack his desk right into a cardboard box and swipe out his security badge one last time.
One senior Wall Street executive said bonus season is usually a reality check, and that when bankers start comparing end-of-year payouts it may well be a wake-up call.
“Everyone thinks they are a top performer,” the source said. “Many aren’t self-aware.”
Earlier this week, it made headlines that Goldman was looking to reward its top performing traders and dealmakers despite the bank’s latest dismal quarterly earnings report. Nevertheless, some dismissed that as the standard practice.
![New York Stock Exchange on Wall Street](https://nypost.com/wp-content/uploads/sites/2/2023/11/wall-st-bonuses.gif?w=600)
“They all the time pay the highest performers,” the source said. “They all the time want to be certain that the highest people don’t leave.”
Overall, bankers this year are facing payouts that would shrink as much as 25% as dealmaking dries up amid surging rates of interest, according to a survey released this week by Johnson & Associates.
While that sounds rough, the laggards may not be getting a bonus in any respect.
Over the previous few years, those on Wall Street have been whipsawed when it comes to bonuses — which usually make up a majority of a financier’s salary.
Just two years ago, firms were handing out record bonuses as financial giants like Goldman Sachs and JPMorgan grappled with a dire lack of bankers amid a large labor shortage.
In 2021, the historic tide of mergers, IPOs, spinoffs and other big strategic deals pushed banker bonuses 30 to 35% higher than their bonuses from 2020. But the nice times got here to an end last year with some bonuses falling by as much as 45% as financiers fretted in regards to the possibility of a looming recession. Unfortunately for those on Wall Street, that downward trend is predicted to proceed.