"While everyone intellectually understood their compensation was going to be coming down 30% to 40%, when people see the number on a piece of paper they tend to have a more visceral reaction than they thought they would," says one. "While some are flat to last year, most are clearly down, and in most cases have a restricted deferred element to the compensation.
"Every banker is becoming a financial institution specialist and working out whether having 60% of their bonus in the stock of that bank is worthwhile."
Who wins in that environment? "The large US money-centre banks are considered to be the best, with JPMorgan the standout because of its share price performance comparative to the street," says one. People are newly optimistic about Citi in this respect, he says – since few feel its share price can get any worse – and always about Goldman Sachs, although "the question on everyone’s mind is how people make money now they’re no longer proprietary trading. They don’t have the answer but they know people will figure it out, and the people who figure it out first will probably be Goldman."
In Europe, headhunters say Deutsche is the closest European equivalent in terms of its likelihood of recovery; "It’s always been a successful bank and the premier German bank, which is where the initiative lies."
