Chalk it up to irrational optimism, perhaps: On the same day that the website eFinancialCareers.com reported that nearly half of Wall Street executives surveys are expecting higher bonuses for 2012 than they received last year, New York State Comptroller Thomas DiNapoli said that compensation was likely to decline.
Here’s an excerpt from the state’s report:
In February 2012, the Comptroller estimated that the cash bonus pool for securities industry employees who work in New York City declined by 13.5 percent to $19.7 billion. Revenue and compensation trends have edged downward since that report and based on those trends the total cash bonus pool for work performed in 2012 is likely to decline for the second year in a row.
That doesn’t exactly square with the findings of eFinancialCareers, which reported that 48 percent of respondents see bonuses rising for 2012. What’s more:
The mood is lifting with more respondents believing that bonuses will increase and less believing they will decrease. Of those who believe bonuses will increase in the next three years, over half (53%) are convinced bonuses will return to 2006-2007 levels. Fifty-eight percent of respondents say they expect bonuses to increase or remain the same over the next three years, up from 54 percent a year ago.
Of course, there’s a third option: Amid lower revenues and job cuts, Wall Street firms will marshal compensation pools to reward profit-generating bankers, leaving less pay for those whose units perform less well.