U.S.-based derivatives professionals are bracing for a lean bonus season, with payments on average expected to be 25-30% down on last year. Even profitable departments, such as credit derivatives, likely will lose out as their bonus pools are raided to subsidize the abysmal performance of equity departments, noted one headhunter. Times are so hard that most firms will be forced to short change employees who have performed well, agreed another New York-based recruiter. In credit derivatives, a director in trading or sales at a tier one bank will be lucky to see much more than USD500,000 this year, versus a bonus of between USD750,000 and USD1 million last year, he added.
Bucking this downturn, however, Goldman Sachs is rumored to have decided to pay flat on last year's bonus levels in at least one of its derivatives departments. Goldman made significant cutbacks in bonus payouts last year and saw defections as a result, observed one recruiter, and as a result is hesitant to see further departures this year. A 50% cut in bonuses last year was reportedly to blame for the walk out by half of Goldman's convertible arbitrage trading desk in New York last January (DW, 2/24). Officials at Goldman declined comment. Goldman will be the first firm to make bonus payouts later this month.
