Jaw-Dropping Bonuses on Wall Street
'Tis the season to gawk at those Wall Street year-end bonuses.
And if there were any doubt that 2006 would be a jaw-dropper, Morgan Stanley yesterday announced that its chief executive, John Mack, would take home $40 million, the largest bonus ever for a Wall Street firm. For those counting, that's a 5,000 percent increase from his $755,000 compensation for 2005. Of course, that year, he declined an offered $28 million bonus because he had worked for the firm only five months.
But it has undeniably been a great year for Morgan–with expectations that next week it will announce a 40 percent increase in full-year profits to $6.98 billion. A strong stock market, and lots of mergers and acquisitions, are boosting the fortunes of the investment bankers. Goldman Sachs is handing out an astounding $16.5 billion in bonuses, up 40 percent from last year. The details of chief executive Lloyd Blankfein's bonus haven't been released, but the $50 million rumor is rampant, with Goldman having announced a 93 percent increase in profit last quarter.
By comparison, Lehman's bonuses look skimpy: Chief Executive Richard Fuld receiving $10.9 million in stock.
Don't feel too bad, however. Nearly half of the nation's employers, 49 percent, plan to give year-end gifts and bonuses in 2006, the highest figure reported in the 25-history of the survey by BNA.
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