Dec. 20 (Bloomberg) -- Wall Street's year-end bonuses climbed 14 percent as increases at Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. more than offset a drop at Bear Stearns Cos.
The four New York-based firms are paying $49.7 billion in salaries, benefits and bonuses this year, up from $43.5 billion in 2006, according to company reports. The bonus portion, estimated at 60 percent of the total, rose to $29.8 billion from $26.1 billion. Merrill Lynch & Co., the third-biggest securities firm, is scheduled to report 2007 results next month.
Investors aren't sharing in the rewards. Bear Stearns has slumped 44 percent this year in New York Stock Exchange composite trading, its worst drop ever, while Morgan Stanley declined 26 percent and Lehman fell 21 percent. Merrill shed 41 percent of its equity value. Only Goldman, led by Chief Executive Officer Lloyd Blankfein, eked out a gain, up 2.4 percent.
``If the company could get away with paying you zero and still think you would be motivated and you wouldn't leave the firm, they would pay you zero,'' said James Ellman, who manages $200 million, including shares of Morgan Stanley and Merrill, at SeaCliff Capital in San Francisco.
Morgan Stanley, the second-biggest U.S. securities firm after Goldman, wrote down $9.4 billion of debt securities yesterday and reported the first quarterly loss in the firm's 72- year history. The ``embarrassing'' loss caused Chief Executive Officer John Mack, who received a $40 million bonus last year, to forgo any reward for 2007.
No comments:
Post a Comment