Kaye/Bassman’s Tim White Quoted in The Street Article, “Banks’ Disastrous Bonus Season Is Only the Beginning.”
FOR IMMEDIATE RELEASE: Kaye/Bassman’s Tim White Quoted in The Street Article, “Banks’ Disastrous Bonus Season Is Only the Beginning.“
Dallas, Texas, 2/1/2012:
In early summer, before layoffs began sweeping across Wall Street, billboard-sized photos of employees were plastered on the walls, pillars and elevator banks of Credit Suisse Group AG’s offices in the United States and abroad.
The museum-quality prints, depicting workers from administrative assistants to senior executives, were emblazoned with motivational words like “Proactive” and “Partner.” By mid-July, however, the photos disappeared and the Swiss banking giant began laying off 2,000 employees.
Security guards prevented employees from taking cell-phone pictures as the posters were stripped away, according to one employee who was present.
“It sent an entirely wrong message,” said an employee, who was not authorized to speak publicly. “Management literally threw away that kind of money on something so trivial, while planning to cut thousands of jobs.”
A bank spokeswoman declined to comment on the internal campaign or the employee’s comments.
Credit Suisse’s timing illustrates the unanticipated dangers of rampant job-cutting, which tend to run in cycles on Wall Street. Employee morale often plummets at a time when survivors are asked to pick up more responsibility and customer relations can suffer as service and relationships deteriorate.
What’s more, layoffs inartfully constructed can come across to shareholders as Band-Aid solutions that at best temporarily cut expenses and at worst pare away reserves of talented people.
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“They finished cutting the fat and now they’re into the muscle and bone,” said Tim White, a managing partner who specializes in wealth management at the recruiting firm Kaye/Bassman International in Dallas.
“Bank of America is not a pretty story, and what we’ve heard is that they’re paying only in stock: not in cash,” says Rose Marie Orens, senior partner at Compensation Advisory Partners, who has advised companies that received government bailouts on their compensation practices, as well as testifying before Congress on the subject. A Bank of America executive who spoke only on condition of anonymity says bank employees are getting some cash bonuses, but would not give any further details.
Bloomberg News reported Thursday that some Bank of America investment bankers would see cash bonuses limited to $150,000, citing anonymous sources. Morgan Stanley, meanwhile, is capping cash bonuses at $125,000, according to widespread reports.
One might expect a recruiter to be a bit more bullish. After all, the bigger the bonuses, the bigger the cut for the recruiting industry, but White is not the only one in his profession who believe things have changed for the long term. White argues the Dodd Frank Wall Street reform legislation “has created an intimate relationship between the federal government and banking.” Going forward, shareholders, the Federal Reserve, elected officials and regulators “are going to have a tough time swallowing seeing people on Wall Street getting huge bonuses,” he says. That means even if profits come back, bonuses might not. As long as profits are down, they certainly won’t.
“If your earnings go down and your stock price goes down, your pay shouldn’t go up,” Orens says.
Read the full story. About Kaye/Bassman Founded in 1981, Kaye/Bassman has grown to become the largest single-site executive search and recruitment firm in the United States with the simple mission of impacting companies and enhancing careers by providing the finest in professional, executive, technical and scientific search. Kaye/Bassman provides strategic recruiting and executive search solutions in over 20 industry practice areas including construction recruiting, healthcare recruiting, banking executive search, energy recruitment and many more. Next Level Recruiting Training, a recruiting training organization, Next Level Exchange, a recruiting training best practices information exchange, and Next Level Marketing Communications are also Kaye/Bassman companies.
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