Blanked: About 14 percent of investment bankers received no bonus last year, more than double the number in 2010, according to a report from the executive-search firm Options Group. Top earners saw more of their compensation deferred, with about 80 percent of total comp pushed back for bankers paid $3 million or more, compared with 50 percent for those making $1 million.
Reuters jumped on the Wall Street job-cuts theme last night, forecasting more firings in months to come. From the story: “It’s just the perfect storm: You’ve got zero rates which are unheard of, squashing net interest margins like never before in history; the greatest regulation ever limiting fees, raising costs, demanding more capital; and then you’ve got a brewing economic disaster in Europe,” said [JPM Securities analyst David] Trone.
Felix Salmon suggests investment bank cutbacks aren’t really news.
The payback: Timothy J. Mayopoulos was named Fannie Mae’s next CEO, which should do little to ease tensions between the government-sponsored entity and Bank of America (BAC). Mr. Mayopoulos was fired from his role as BofA’s general counsel in 2008. The two companies have been grappling over whether BofA will buy back billions in mortgages with faulty underwriting that it sold to Fannie.
Whale inquest: Officials from the Office of the Comptroller of the Currency, the Treasury Department and the Federal Reserve will testify at a Senate Banking Committee hearing today on trading losses in JPMorgan’s chief investment office.
Whither Europe: Germany is working on a plan to recapitalize Spanish banks with European rescue funds without burdening Spain with the stringent economic reforms placed on bailed-out neighbors such as Greece and Ireland.
Trustees clash: Tensions were already high between Louis Freeh and James Giddens, the two trustees seeking to recover claims arising from MF Global’s collapse last fall. Then Mr. Freeh, who’s responsible for recovering funds for the parent company’s bondholders, demanded $2.3 billion from MF Global’s brokerage unit—a move Mr. Giddens said would force him to set aside funds that might otherwise go to MF Global customers.
Complaint box: Treasury Secretary Tim Geithner pressed bank executives to spell out specific objections to Dodd-Frank.
Gotcha: After burying its head in the sand for years when it came to a ponzi scheme that cost investors billions, the government appears to be tying up loose ends such as this one—a former Bernard L Madoff Securities employee named Craig Kugel pled guilty yesterday to tax fraud. On one hand, Mr. Kugel was aware that the firm paid salaries and benefits to people who did not actually work for the firm. On the other, Mr. Kugel “charged more than $200,000 in personal expenses, including luxury clothes, jewelry, and vacations for himself and his family, to a corporate American Express card but did not report it as income on his tax returns.” Mr. Kugel faces up to 19 years in prison.
