Responding to the political pressure, three major Wall Street firms, Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co’s investment bank have slashed their compensation in Q4. This is wake of the up coming details of the bonuses for their top executives, slated to be released in few weeks.
Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co’s had set aside almost USD 40 billion for pay in 2009, about USD 5 billion less than the 2007 record of USD 44.7 billion. The total is almost USD 10 billion short of the analysts’ forecast of October.
Although the amount allocated in Q4 is much lower, the compensation costs are more than enough to pay USD 336,843 to each employee at the three firms. This would be more than six times the US median household income of USD 50,303 in 2008.
However, the individual compensation varies as the low-level employees often earn bonuses of less than USD 100,000. On the other hand, the global division heads may receive over USD 10 million.
