01 Feb 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:
“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.
“I don’t know if those bonuses are coming back, ever,” says Tim White, managing partner at Kaye/Bassman International, a recruiter based in Dallas.
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.
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