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Pay and Prestige Still Closely Linked on Wall Street Despite Financial Market Turmoil

October 8, 2009
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There’s an old saying among Wall Street workers that only two things really matter: how much you get paid and how others regard your firm.

A survey of banking professionals released Wednesday, October 7, by the jobs Web site Vault.com demonstrates just how true that is: It showed that the best-paying firms also happen to be the most highly regarded.

Leading Vault’s list of the 50 most prestigious banking employers for 2010—for the 11th consecutive year—was Goldman Sachs, even though the bank’s public reputation has suffered in this era of massive government bailouts.

By quickly recovering from last year’s stumble and continuing to coin massive sums, Goldman is able to pay its employees extraordinarily well. It is on pace to shell out compensation and benefits at an average annual rate of $772,000 per person this year, according to data from its latest available regulatory filings.

That largesse surely helps explain why one respondent to the Vault.com survey called Goldman “still the best.”

Respondents, by the way, were not allowed to rate their own employers and were asked to only rate firms they are familiar with.

At private equity powerhouse Blackstone Group, which ranked No. 2 on the list, the pay is even more fabulous.

Blackstone is on pace to award its 1,340 employees an average of $2.6 million this year, using data collected from its most recent earnings release and annual report. It may rank lower on Vault’s list only because it’s so much harder to get a job at Blackstone, which has a mere one-twentieth of Goldman’s headcount.

The biggest moves up the list came from the banking boutiques. Evercore Partners, a merger advice specialist, jumped to No. 8 from No. 17, and Greenhill & Co. gained seven places to No. 6.

These firms may not pay quite so well as their much larger rivals—Evercore’s average annual payout this year is on pace for $500,000 and Greenhill’s for $460,000—but at least they are free of the compensation restrictions that the government has imposed on bailed-out banks.

Clearly, those bailouts have had an effect on how potential employees view the banks. The one institution to post a significant decline in standing was—perhaps no surprise here—Citigroup. Its consumer banking division dropped 22 slots to No. 41, with survey responders pithily observing that the bank was “in trouble” and has an “uncertain future.”

Indeed.

Regardless of where they punch the clock, many Wall Street workers expect to get paid more for their labors this year. After all, most lines of business have perked up significantly since last fall’s global credit and markets meltdown—and there are 20 percent fewer employees to fight about bonus pools.

According to a separate survey of 1,074 finance professionals by eFinancialCareers.com, more than a third expect their bonuses to increase compared with last year, and 25 percent expect their payouts will rise by more than 10 percent. In addition, 60 percent said that current bonus policies have no effect on the amount of risk they take, while 12 percent of respondents said they are “emboldened” by their firm’s bonus policy to take additional risk.

“This finding may rile regulators who have concluded that compensation arrangements often created incentives for excessive risk-taking with insufficient regard to longer-term risk,” eFinancialCareers wrote.


Filed by Aaron Elstein of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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