Wall Street Execs Make $1.6 Million/Year, But "It's Not A Lot Of Money"

Time to break out the tiny violins! Sure, $1.6 million for the year is a lot of money—hell, $160,000 is a lot of money—but Wall Street Journal's Dennis Berman reveals that one financial firm "paymaster" (the guy who sets salaries and compensation at a firm) says of the amount given to a mid-career investment banker, "It's not a lot of money." Damn all those other investment banks for screwing over the economy and sending us spiraling into the financial crisis because only taking in $380,000 in after-tax money SUCKS!

Berman gets the scoop on the math:

The paymaster noted that median precrisis pay was about $2.2 million a year. On average, some $200,000 came in base pay, with the remaining $2 million coming in an annual bonus, about 60% of which was paid in cash.

That is roughly $1.4 million before taxes, leaving after-tax take-home cash of about $700,000 a year, he calculated. That is slightly less than at the banker-pay peak of the early 2000s.

Today, the paymaster said, median banker pay is about $1.6 million. Base cash pay is higher, at about $400,000. But now, the bonus portion has been flipped. About 60% to 70% comes in the form of deferred compensation, largely in company stock.

That means there isn't nearly as much cash coming in during the first year of the pay package. Roughly speaking, that comes to about $380,000 in after-tax cash. A princely sum by most standards, but quite a comedown for anyone conditioned to take home nearly double that.

What also stinks? These i-bankers can't "retire rich in their 40s or early 50s.... Now, with so much of his or her compensation at risk, the prospect of the banker toiling deep into his 50s or even his 60s is very real." Maybe they should watch Inside Job to realize why their pay is lower.

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By Jen Chung in News on April 26, 2011 6:23 PM

Comments [rss]

thetailor

Hey, if I made my living screwing people like these guys do, I wouldn't want my money in deferred compensation packages either ... because the odds are, when I'm gone, someone is going to screw me and I'll never see it. But that's the price you pay for being economy-ruining scum.

SpideySense

Alms for the Wall Street execs.....
Alms for the Wall Street execs.....

winning1234

ibankers work a lot harder than these haters that complain.

100

True that. But if they're working 80 hours/week (a bit less than twice as much as I do) I'd be OK with them getting paid three or even five times as much. But ten to fifty times as much? For what is essentially a government-protected racket that wrecked our economy? I think it's appropriate to hate on that.

Guest

Thank you for pointing out that it's government protected. If it had been left to its own devices, those companies would have went belly up, as failed companies are supposed to do in a capitalistic society. We might have had a few slow months, maybe a year, but some financial firm that didn't screw up would have taken over and gotten people back on track a lot quicker than the government has.

ReligiousWacko

There is no way the median is 1.6 million. I'm sure writer got average and median mixed up.

Peanut_Butter

Clearly you don't know a darn thing about yachts. Their upkeep is costly.

jp

it's easy to bash 'wall street'. people that are the best at what they do and make money for the companies that they work for should get paid high salaries. it's called capitalism...i don't know where the hatred of the successful started.

InvestmentReform

It's easy to bash them because they've subverted capitalism. You're drawing on some backward, antiquated notion of aristocracy. The wealthy are not the best and brightest, but merely well connected. That is not capitalism, nor merit. An insulated, self-serving plutocracy that is in competititon with no one does not constitute "success."

Stevennnn

it's greed and thinking you're much better than everyone else because of $.

WetButt

yea theyre the best at creating artificial bubbles for food, housing, commodities oh and scamming the US government good work guys dont let the haters get you down

Len_Drexler

Maybe it's because they create nothing of value.

Guest

So, the possibility of guaranteeing someone's retirement will go well and they will never have to worry about money is nothing of value?

Steven Harris

There aren't any garuntees, in fact a lot of these advisors will steer their clients in the wrong direction to make a quick buck. What happened in 2008 when everyone's retirement portfolio halved?

Guest

I understand that, but the person's comment was that all financial institutions
have no value. I know of one financial institution, that I worked for when I
first moved here, that was unaffected by the recession and their customers'
retirement plans are guaranteed. That was my point.

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Detex

I would be willing to bet that 90+% of the businesses you rely on every day could not have started without the financial backing of the system you seemingly hate. Where did your boss get the finding to start the company that feeds your family? Not everyone in the industry is shady or looking to screw everyone over...

Let's just be fair.

100

Baloney. Basic banking is useful - it's loans to businesses to allow them to grow. No problem with that. Derivatives creation and complex investment banking is horrendous.

Detex

I was just making the point that not ALL of the financial sector is bad... Everyone likes to demonize.

Also, I agree the derivatives may have been a bad bet but it WAS the public who took out loans they could not pay making the derivatives a bad investment.

virgilstarkwell

neither do baseball players - but they get paid a shitload because they make the owners an even bigger shitload.

100

Pro baseball players may well be overpaid, but at least they provide entertainment. That has value. Wrecking the US economy actually destroyed value.