Contrary To Rumors, New York Comptroller Sees An Increase In Banker Bonuses In 2011, As Rick's Cabaret Prepares To Add Locations
One of the more pervasive recent disinformation campaigns, one which has seen the very active media participation of GE-subsidiary CNBC, has been that bonuses on Wall Street are expected to decline on aggregate by 10-20%. After all, Morgan Stanley has gone so far as leaking information to the broader public that employees they may see a 10-30% cut in bonuses: why they would do this makes no sense, as it does nothing but put the bank in a competitive disadvantage vis-a-vis the only commodity on Wall Street: banker "talent." On the other hand, the information makes perfect sense considering that as we recently disclosed, in a Bloomberg poll, over 70% of respondents stated their firm belief that no bankers (of bailed out institutions, which means all of them), should get bonuses this year. Public anger at the banker class is palpable, and nothing is sure to generate spontaneously combustible public non-DA like overhearing a discussion over who will foot (or, better yet, expense) the $50k Cristal bill. So while the media is distributing stories about the imminent poverty of Wall Street, quietly, and behind the scenes, the banking class could ostensibly pocket one of the biggest bonuses paydays in history. And while the plan may have been working effectively until now, a brand new report just released by the New York City Comptroller (who has absolutely no incentive to overestimate revenue numbers, and is in fact motivated to show as a bleak a financial picture a possible to also get on the taxpayer gravy train) throws some cold water in the face of this clever scheme. To wit, from page 16 of the report: "total compensation in the industry is expected to be up modestly once year-end bonuses are paid." So, bonuses are going to be... up?
The relevant section from the report (the full thing is a very interesting read):
Because the financial sector generates a disproportionate share of its private wages, the city actually experienced a comparatively severe loss of income during the recession. In 2009, total wages paid to workers in the five boroughs declined 10.8 percent, compared to a 4.6 percent decline in wages nationally. The City’s steeper decline was primarily attributable to declining employment and lower compensation in the financial sector, in which total wages (including salaries and bonuses) declined 24.4 percent. However, the financial sector’s rapid return to profitability reversed that trend, and in the first quarter of 2010 private wages increased by 8.1 percent, greater than the fourth quarter of 2009. During that period, finance sector wages were up by $4.2 billion, or 14.4 percent, reflecting the higher bonus payments made on the basis of 2009 earnings. Excluding the securities sector, private wages rose only 3.6 percent.
Wall Street profits, as measured by the pre-tax net income of the New York Stock Exchange (NYSE) member firms, were a record $61.4 billion in 2009, almost three times the previous record of $21 billion in 2000. It is estimated that the city’s securities industry paid $25.4 billion in cash bonuses during the last quarter of 2009 and first quarter of 2010. The astounding recovery of financial firm profitability in 2009 has been followed by a mixed year in 2010, yet total compensation in the industry is expected to be up modestly once year-end bonuses are paid.
And if today's earlier report that Goldman's prophets are about to receive $111 million in delayed comp in January, is not an indication of how good the times are for a recently bailed out banker class, then the following report will certainly seal it:
Rick’s Cabaret International expects to add four more locations next year.
The company expressed optimism about 2011, and reiterated its goal of making at least one acquisition per quarter.
Rick’s also said that Dallas hosting the Superbowl, in February, will also be a benefit, given its “terrific cluster of seven clubs ready to welcome fans” in the city.
Well, at least one "banker-derivative" job is set to return to its golden age (that, and of course Alex over at SL).