Top executives and traders at some banks are expected to receive huge bonuses this year, and at least one big institution is starting to hire more loan officers. But in the banks' back offices, many other workers—including those in technology services, human resources, and support departments—face layoffs, outsourcing, and reduced pay.
The investment banking operations of Goldman Sachs (GS), Morgan Stanley (MS), and JPMorgan Chase (JPM) are on track to pay record bonuses this year of about $29.7 billion, analysts say. That's an increase of 60% from last year and it would even beat the previous high of $26.8 billion in 2007. Further down the income ladder, some banks are easing up on pay lids as well. Effective in 2010, for instance, JPMorgan Chase will lift a salary freeze on employees earning more than $60,000 a year. It also has restored matching payments for employee retirement accounts and plans to give a $500 "special award" to staff members who earn less than $60,000.
But for the most part, support staffers who have managed to keep their jobs in financial services face stagnant or falling compensation. Average real hourly wages for nonsupervisory workers in financial services have increased a mere penny so far this year, from $20.46 in January to $20.47 in September, according to the Bureau of Labor Statistics. That's after dipping to $20.40 in February.
"[W]orkers who are not in revenue-generating positions…are not usually eligible for the big bonuses," says Christian Britton, a compensation analyst at PRM Consulting, a compensation firm in Washington. "These positions are usually more expendable."
Many job titles at financial institutions experienced either no pay raises or pay cuts from 2008 to 2009, according to Crowe Horwath, an accounting and consulting firm in Chicago. During that period, chief credit managers, for instance, saw compensation shrink by 6.4%. Bank branch managers saw a decrease of 5.8% and commercial loan officers saw no increase.
"For us, it's not what you read in the headlines," said a Barclays Bank (BCS) New York City employee in his twenties, referring to anticipated bonus payments for some bankers. He declined to disclose his name or job function, citing a company policy to not speak with the press on compensation matters.
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