Wall Street is Swimming in Money
It's a great time to be working on Wall Street.
It's a horrible time to be working pretty much anywhere else in America.
It's a great time to be alive if you call Morgan Stanley, JPMorgan or Goldman Sachs home.
These companies are lavishing riches upon new and existing employees at an unprecedented clip.
Meanwhile, average Americans deal with soaring unemployment rates, plunging real estate values and a general uneasiness about the future of their country.
On Wall Street - not so.
After a few rocky quarters, things are right on track once again.
It was recently revealed that Goldman Sachs had set aside 49% of their first half revenues for employee compensation (bonuses, salaries, etc).
This worked out to an unbelievable $386,429 PER EMPLOYEE for just that period.
Not to be outdone, Morgan Stanley recently revealed that they are earmarking 72% of their Q2 revenues for "compensation and benefits".
How would you like to be a Morgan Stanley shareholder and hear that nugget of news?
The reason for these unbelievable sums that are being diverted to the wallets of Morgan Stanley workers?
A "war for talent".
If Morgan Stanley doesn't lavish these riches on their employees, some people warn, these "valuable" workers will go somewhere else (Goldman Sachs or JPMorgan, which also recently dramatically increased their levels of compensation).
Sure, Wall Street axed a great deal of jobs last year.
However, if you were lucky enough to survive the cut, then you are surely banking now.
According to Bloomberg.com, Morgan Stanley, Goldman Sachs and JPMorgan set aside a total of $23.32 billion dollars (combined) in the first half of 2009 for compensation.
Let's break out the calculators for a second.
Morgan Stanley, Goldman Sachs and JP Morgan employ a total of 117,398 people combined.
That means that the average compensation at these three firms is going to be $198,640.52 PER EMPLOYEE for just the first six months of 2009.
Goldman Sachs will have a compensation rate of $386,429 per employee for H1 2009, JPMorgan will have a compensation rate of $232,983, and Morgan Stanley will have a rate of $95,009.
I can't wait to hear what the guys at the top end up making when 2009 is in the books..
All of this against a backdrop of a greatly suffering nation that has an economy which is seemingly spinning out of control.
Are these firms really doing this just to keep people from leaving their firms?
Or are they just gorging themselves on profits and flipping the bird to the rest of the country?
You tell me..
Source: Bloomberg.com - Morgan Stanley Sets Aside 72% of Revenue for Employees' Pay
Filed under: General Knowledge