“That is assuming revenues again grow. If they don’t, firms could actually be handcuffed on pay. In the face of further revenue declines, a firm could find itself saddled with large accruals for deferred compensation, along with a higher, fixed total for base salary and benefits. The choice may then be between slashing current-year incentive pay or letting the closely watched compensation-to-revenue ratio spike.”
Wall Street Pay Gets Even Trickier to Figure
Does anyone really think banking revenues are going to go up substantially in the next 5 years? What is bigger than a global real estate bubble? Commodities? No other asset in existence today is as attractive to the public. If you can’t use the public then you need to rely on governments and that’s not going to work.
Banking is in a tough spot through this economic transition.
