Citi Joins The Cost-Cutting Ranks By Slashing Bonuses Up To 70%

Tyler Durden's picture

Bloomberg's Trish Regan (yes, she is no longer at CNBC), has just announced that the bank which earlier announced it is shutting down its catastrophic prop trading desk (at which point shreholders let out a sigh of relief), has proceeded with slashing banker pay by 30% for overall comp and some bonuses by as much as 70%. This follows earlier announcements by Bank of America and Morgan Stanley which earlier said they would limit cash bonuses to $150K for senior positions. At the end of the day, the biggest losers are secondary, non-financial New York jobs (supposedly there are some: rat exterminators; strippers; limo drivers; food spitters also known as waiters?) as each banker jobs indirectly supports up to 3 downstream jobs. In other words between layoffs and comp cutting, the immediate impact will likely be to leave New York City, which is the farthest point on the economic procyclical receiving end, with hundreds of thousands of layoffs. Which incidentally, to the bizarro crazy scientists at the BLS, means that initial claims are about to go negative (with the traditional upward revision in the following week).

A chart showing average salaries in NYC for financial professionals and "all other"

And while bankers are general reviled, the truth is that in NY they are largely responsible for keeping the city cranking. From the most recent report on banker comp by the NYC comptroller:

The securities industry is critically important to the economies and budgets of New York State and New York City. It now seems likely that profits will decline sharply from last year’s level, job losses will grow, and cash bonuses will be smaller. Such developments would have a ripple effect through the rest of the local economy and hinder the recovery. In addition, tax collections are likely to fall short of expectations for this year and next year, complicating already tough fiscal situations for New York State and New York City

And why every banker job is reponsible for at least three other jobs:

OSC estimates that each job created (or lost) in the securities industry leads to the creation (or loss) of almost two additional jobs in other industries in the City. (The large income losses during the crisis have slightly reduced the value of the multiplier compared with earlier estimates.) OSC also estimates that each new Wall Street job creates one additional job elsewhere in New York State, mostly in the City’s suburbs. Based on these multipliers and the current level of Wall Street employment, 1 in 8 jobs in the City and 1 in 13 jobs in the State are linked (directly or indirectly) to the securities industry.

Below is full most recent report.

 

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HelluvaEngineer's picture

All their greatest talent is going to leave and work at...

Sofa King's picture

I think a little pee just came out.

Badabing's picture
Citi Joins The Cost-Cutting Ranks By Slashing Bonuses Up To 70%

and put into compensation packages.

Fixed it!

Stax Edwards's picture

OT:

This interview of David Stockman by Moyer is an absolutely eloquent and accurate description of where we find ourselves today.  Anyone can understand this description of what we now call free markets and captialism.

It warrants its own post TD, post it up and lets discuss.  We have got to attack this beast head on sooner than later.  Spread the word, the message is resonating as we the people flounder with no job opportunities and underemployment.  Time to get active in our communities and spread the word.  If we don't act it will continue ad nauseum.

http://www.commondreams.org/video/2012/01/21

Note at 42:25 it is stated that Glass Steagall was 34 pages and Dodd-Frank is 2300 pages.  Hmmm.  Who benefits from this complexity?  Hint: It is not small enterprises.

BidnessMan's picture

My auditor sends in a pre-audit checklist.  One of the questions was "Do you comply with all laws and regulations".  I laughed and asked if he had finished reading all the 40,000 rules and regulations that reportedly went into effect on January 1, 2012 yet.  Just lunacy.  Everyone in the US violates some law or regulation every day.  Just by the grace of God that some regulator or law enforcement officer from any number of state, local, regulatory, and/or federal agency does not bust you every day.  Complexity just sets everyone up to be busted at any time for any number of "violations".  

Cdad's picture

Correct.  And that is the reason Fascist American politicians write those bills the way they do.  So they can haul you in any time they like.

Hey...I'm gettin' sumpin' here...FEMA camps?

Zero Govt's picture

it'll have to be another unproductive commission-cutter job where you mis-manage risk to roll in bonuses and go bankrupt when all the rotten deals pile up as bwankers aren't good for much (anything productive)

maybe the diabolical insurance or pension industries or some other mandated by Law business forced down societies throats like healthcare (they're all absolute shitholes)

CNBC is another outlet for useless people (the blubbering Joe Kernan is driving me fuking nuts with his inane guff)

Cdad's picture

Turn it off!  Turn the BlowHorn [CNBC] off!  I am here to testify...the quality of your life will improve the moment you do.  

breakyoself's picture

Joe Kernan is annoying as hell and it took me a few times of watching to figure it out. I haven't watched that segment of CNBC in a long time. Joe irks me like that Varney guy on Fox.

HD's picture

What is sad, is that Joe is an educated man and at one time a good journalist (well, talking head at least). Now he is nothing more than an ideological zealot - who can no longer be objective (at least not on air) and just parrots talking points.  CNBC lost its heart when Mark Haines died - I don't watch CNBC anymore (happy to be off the treadmill) except when I have no other choice. I think the late Mr. Haines would be spinning in his grave to know Cramer is on SOTS.

 

 

Money never sleeps's picture

Absolutely fantastic interview of Kyle Bass.  Great example of what's we're all up against - statists, statist-protecting media, etc. http://bit.ly/ywzqNI

Stax Edwards's picture

Can we get a chart showing finance industry pay overlaid with .gov debt expansion?  You mean there is a high correlation here? No, say it aint so.

slaughterer's picture

I work for Deutsche Bank.  It sucks here.  We are losing tons of money.  Can I work for Zero Hedge or Banzai?  

ZeroPower's picture

Actually? What office?

Staying on topic, friend over at Credit Ag (HK) confirmed hes getting a 1/5 of base bonus this year. Pretty horrible out there, specially at the french banks.

Sheriff Douchenik from AZ's picture

(cont'd) work at...the RIAA or MPAA.

emunah73's picture

...JPM Morgan Chase, unless they will start fire too. But I guess they will be the last and now they still have some openings.

Seasmoke's picture

dick trickle down

Cdad's picture

Now that is a pinch of "recovery" that Cdad can believe in.

MOAR....MOAR financial services pink slips, please.

fuu's picture

Banksters getting the Nerf bat again!

NuYawkFrankie's picture

Let them eat poppadoms

lotsoffun's picture

really.  we outsourced all the jobs to them, and at the same time, exported them in to us.  you think they gonna give you a crumb?  they grabbing it all up .  i think they are called 'brahmins'.  i'm a panties man myself.

 

tao400's picture

Things are really bad, a lot, lot worse than is apparent. Before Christmas I met with my property manager in Atlanta who manages 8 million square feet to pay the office rent. My tower is like 100k square feet. He told me that things are worse now, with more companies going bankrupt, than they were in the bottom of 2009. I promptly walked down the hallway and sold almost all my stocks and kept selling into the rally. Now with Bernanke keeping rates low to 2014, it is now openly admitted how bad things are. In fact, it is actually very scary. Fortunately, I have some gold and stock pile a little food. I keep remembering that movie Too Big to Fail where William Hurt as Paulson says to his wife, "we were a week away from no milk on the shelves." Time to take a bunch of cash out of the bank and bury it somewhere just to be sure.

Cdad's picture

Oh come now tao400 you crazy, nutbag prepper.  What's wrong?

Stocks are jumping like unicorns at a special Wall Street rodeo, and there is no inflation because Ben Bernanke is on the job...and Congress is a writin' and a passin' bills left and right, and look...no more debt ceiling problem.  President Zero is covering the bill on Health Care, and corporate taxes are so low that corporations...well, they aren't really paying any these days.

And all around the world, bills are being easily covered by central bankers printing money and handing it out to all the banks, so the unemployment thing is really no problem at all because...who needs to work anyway?  And didn't you hear...Greece is fixed!  Why it is so fixed, European cental bankers have told us it is fixed 23 times now.

And oil is...errr...never mind.  And corn is....well....look how much the shiny metal is worth?  Yer rich, I say!

So gather up the skittles that are falling from the sunshine sky, and grab up some pixie dust while yer at it, 'cause it is practically free!  

We're all fine.  And anyway, if me and President Zero and Ben Bernanke are all wrong [pfffft], you don't even need to worry anyway because there is plenty of room down at your local FEMA camp.  Three hots and a cot for all!

UP Forester's picture

A better movie is Rollover (1981).

 

Except the Saudis are now derivatives.

navy62802's picture

::shock::

They still get a fucking bonus? Why? For ruining the US financial industry?? Not only should they not be giving out bonuses, they should have their base pay cut. It is sick that we are shocked at a 70% reduction in BONUS. I'd be shocked by a 70% reduction in base pay. I'm actually still in shock that they are giving out tax-payer funded bonuses.

NotApplicable's picture

I'm in shock that anyone expects criminals to behave differently.

YC2's picture

the bonus is where it hurts, especially as you go up the ranks. base pay is meh in comparison

Conman's picture

You are insane. Meh meaning still over 200k which is a lot to msot people when the average salry in the us is ~20k.

navy62802's picture

Assuming a base pay of 200k, a 70% reduction would put them at 60k which is still well above the average salary. Obviously, the bonus is where it hurts. Hahaha.

knukles's picture

Hahhahahaha
That's probably what they're thinkin'...

          .... Oh fuck meh

lotsoffun's picture

how do you like your ipod? made by workers at 70 cents an hour.  makes you feel good?  you really are much smarter than those coolies.  you DESERVE it.  oh - poor steve jobs and his liver transplant.  karma is a bitch.  it really is.  now i can listen to music 25/8 and groove and groove.  can't wait to buy into the facebook ipo.

 

 

YC2's picture

I dont work at a bank, I just know how the comp works, jeez.

Bam_Man's picture

Yes, that $250-300k base pay doesn't buy a whole lot of fois gras and Bollinger Grande Année these days. And now that the Chinese have discovered Grand Cru Burgundy and First Growth Bordeaux, the bankers will be trading down to Mondavi. Oh, the humanity!

Racer's picture

As a reminder, every financial service job in New York indirectly is responsible for 3 downstream non-financial jobs"

yes, that is true, among them are:

Unemployment officer

BLS unemployment data 'adjustment' officer

Food stamp distribution officer

pine_marten's picture

Saddist goon jailor should be in there too.

dwdollar's picture

Too little, too late. Won't stop public anger one bit.

Problem Is's picture

Life's a bitch...

Your bankster pay gets cut 70% and the plebs and gomers still want to go medieval on your ass...

wonderatitall's picture

this is just terrible. poor shumucker the yapper will have to do what every democrat does  now, steal. i myself am glad that obamanomics is coming to ny the 2nd most disgusting city ,behind che'cago. this is what i have always wished. that the rich bastards stop patronizing these swineherd business and that democrat ny dies a horrible puss filled death...

 

on the bright side , TRISH REGAN IS HOT.  tear down this blue wall of oppression mr obamachev and let a stupid repub have a chance to fuck shit up!!!

ps- DID I MENTION THAT TRISH REGAN IS HOT

 

11b40's picture

The degree that this country is screwed is like compounding interest.  It matters not which "PARTY" holds power over government.  Neither one has control over our final fate anymore than they can control a hurricane heading for shore.  The laws of nature nor the laws of math will be subjugated by mere mortals.

By the way, however, it was Bush the Lesser who pushed the snowball over the summit and started it rolling downhill.  It could have been stopped 10 years ago, but the course has now been set, and it will be run.

fonzannoon's picture

The banks gave these guys huge salary increases a few years ago. They did that in lieu of bonuses. So now when they "slash" bonuses it looks these these guys are paying the piper when they are still smoking the piper.

resurger's picture

Have you seen this Video of this guy?!

http://www.youtube.com/watch?v=ehWrbBiPxOk

Jo Granville Dow to plunge

slaughterer's picture

I buried Joe Granville in the bear cemetery a few days ago.  Forget about him.