<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>And expect the Papaya ministers to change the benchmark against which their awesome pay is pegged when times change?
Oct 5, 2008
HIGH-LIVING BANKERS
</TR><!-- headline one : start --><TR>Will they have to give these up?
</TR><!-- headline one : end --><TR>Seven-figure bonuses are now history - so bankers are tightening their Gucci belts and downscaling lifestyles </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Grace Ng
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Mr Pan Zai Xian of executive search firm Robert Walters Singapore says pay in Asian banks is unlikely to be as drastically cut as in the US.
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->As the nightmare on Wall Street continues to stalk its victims in major capitals, the fat cat bank staff who once raked in multimillion- dollar packages have been left licking their wounds.
Many, especially in New York and London, have been shown the door.
Here in Shenton Way, the great salary squeeze has already started for Mr S.L. Chua, a banker in his 40s at a major American financial institution, and his peers.
'Management has already started warning us to expect little or no bonuses. Last year, I got 10 months' bonus; 2005 and 2006 were great times as well. But this year, my best-case scenario is to get one or two months,' he said.
And the worst case?
'Getting a company T-shirt as a goodbye gift - like what my US counterpart got when he was fired,' Mr Chua said with a shudder. He counts himself lucky that he is working at a bank that is still standing amid the debris of fallen institutions.
He is thankful too that he is working in Singapore and not at the epicentre of the crisis in New York.
'At least Asia still has growth, so there's some business to do and money to earn. But in the United States, there's a lot more weighing them down,' he added, nervously fingering his Patek Philippe watch which he had bought for 'a high five-digit sum' with part of his bonus in 2006.
With the turmoil described as the worst since the 1930s Great Depression, massive layoffs and cost cuts by embattled financial firms, and new rules curbing CEO pay have kicked in elsewhere.
Big-name investment banks that used to set stratospheric bonus benchmarks have become, or are becoming, history.
When they were the masters of the universe, a record US$38 billion (S$55 billion) was dished out last year to the 186,000 US-based staff of Goldman Sachs Group, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns.
The largesse works out to an average of US$201,500 for each Wall Street denizen, reported Bloomberg.
This is four times the median income of an American household. It is also enough to buy a Porsche 911 Turbo Cabriolet, a common sight in Wall Street.
In Singapore, senior bankers performing the same role at top international financial institutions get roughly the same net after-tax pay as their counterparts in the US and other financial centres worldwide, said Mr Pan Zai Xian, a manager at executive search firm Robert Walters Singapore.
Executive pay experts here estimate that the pay package for a top investment banker last year was well over $1.5 million, including a seven-figure bonus.
Traders with the golden touch could command 'several million' as their pay was largely based on commission.
The big-league American and European banks with operations in Singapore - which include JP Morgan, Goldman Sachs, Citigroup, Merrill Lynch, Morgan Stanley, Barclays, RBS, UBS, Credit Suisse and Deutsche Bank - hire well over 30,000 staff here.
For Mr Chua, who would describe his job only as 'handling key deals for institutional clients', salaries in the past three years were in the 'decent six figures'.
This was enough for two landed property investments in prime districts, an Audi A8 luxury car and a wardrobe of branded clothes for his wife.
But with the recession looming and bonuses looking anaemic, Mr Chua has decided to go on an 'austerity drive'.
He has ditched plans to buy a BMW 7 to replace his Audi. He will also buy 'only second-hand watches' and 'not indulge in thousand-
dollar wines now'. Hundred-dollar wines will do, he mused.
It is still too early to determine exactly how much bonuses will be cut for most banking jobs in Singapore, noted Mr Mark Ellwood, managing director of Robert Walters Singapore.
Mr Chua Tek Yew, a partner at executive search firm Whitehead Mann Partnership, noted: 'The local operations are still waiting for news from their headquarters in New York about the bonus pool and budgets when the financial year closes in a few months' time.
'But it is clear that managements have already started to manage expectations of their staff, especially the top performers.'
For the more conservative European and Asian banks, pay is unlikely to be as drastically curtailed during a downturn as that at the Wall Street investment banks. The latter tend to pay much bigger bonuses during boomtime but cut more during downturns, noted Robert Walters' Mr Pan.
Layoffs at beleaguered financial institutions in the US and Europe have hit well over 20,000 to date - and counting.
European and commercial banks here may still pay out one or two months' bonus this year. But the local top investment bankers from Wall Street banks could suffer a take-home pay cut of half or even three-quarters, a headhunter with a foreign executive search firm suggested. He declined to be named, saying his estimates were 'a very rough guess'.
'Among those badly hit will be traders who relied heavily on commissions and performance bonuses,' he said.
One banker in his 30s here reckoned he might get 'an 80 per cent pay cut' as his base salary was only 20 per cent of his total package.
In the past year, his team of a handful of people had earned a
few million dollars from commissions on the structured products they had packaged and hedged risks for. Some of these products had exposure to the now-bankrupt Lehman Brothers. The commissions were split among the team.
But now business and commissions have ground to a standstill, he said.
He now spends his time on tasks that will not earn him big bucks - like sorting through 'a mountain of claims' against Lehman Brothers.
A trader with a US financial institution, who gave her name only as Ms Lin, said she 'shed a few tears' as she watched 'trading dwindle to nothing'.
'I don't have much to do now, so I've started a list of the branded goods and jewellery I plan to sell to friends on Facebook and eBay, in case my salary gets cut to half or less next year,' she said.
Ms Lin, who is in her late 20s, admitted she had bought 'some diamond pieces' with her 'high five-figure bonus' last year.
But now that she has a hefty mortgage on a new apartment in District 10, she is thinking of selling a few sparklers so that she can comfortably sustain her monthly loan payments, as well as her 'expensive addiction to Gucci and Prada'.
'There are just some things that I feel I can't do without now that I have attained this lifestyle. It's hard to downgrade a lifestyle even after your salary has been downscaled,' she said. 'I've become greedy.'
US bankers have been widely criticised for the greed that led them to pursue higher profits and bonuses - by cobbling together the complex investments linked to toxic sub-prime mortgages.
=> Sounds like the insatiably greedy Familee and its Papaya running dogs!
There is now a backlash by the American people against what is perceived as excessively high pay for the CEOs of American banks whose mistakes created the financial market maelstrom, noted headhunters.
Still, headhunters said high pay may still eventually make a comeback - even if the institutions in Wall Street and Shenton Way become drastically altered amid the consolidation in the financial sector.
Mr Pan noted: 'Greed is part of man's nature and despite whatever structures being put in place, smart people will find ways around them to make money for themselves.' [email protected]
Oct 5, 2008
HIGH-LIVING BANKERS
</TR><!-- headline one : start --><TR>Will they have to give these up?
</TR><!-- headline one : end --><TR>Seven-figure bonuses are now history - so bankers are tightening their Gucci belts and downscaling lifestyles </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Grace Ng
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Mr Pan Zai Xian of executive search firm Robert Walters Singapore says pay in Asian banks is unlikely to be as drastically cut as in the US.
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->As the nightmare on Wall Street continues to stalk its victims in major capitals, the fat cat bank staff who once raked in multimillion- dollar packages have been left licking their wounds.
Many, especially in New York and London, have been shown the door.
Here in Shenton Way, the great salary squeeze has already started for Mr S.L. Chua, a banker in his 40s at a major American financial institution, and his peers.
'Management has already started warning us to expect little or no bonuses. Last year, I got 10 months' bonus; 2005 and 2006 were great times as well. But this year, my best-case scenario is to get one or two months,' he said.
And the worst case?
'Getting a company T-shirt as a goodbye gift - like what my US counterpart got when he was fired,' Mr Chua said with a shudder. He counts himself lucky that he is working at a bank that is still standing amid the debris of fallen institutions.
He is thankful too that he is working in Singapore and not at the epicentre of the crisis in New York.
'At least Asia still has growth, so there's some business to do and money to earn. But in the United States, there's a lot more weighing them down,' he added, nervously fingering his Patek Philippe watch which he had bought for 'a high five-digit sum' with part of his bonus in 2006.
With the turmoil described as the worst since the 1930s Great Depression, massive layoffs and cost cuts by embattled financial firms, and new rules curbing CEO pay have kicked in elsewhere.
Big-name investment banks that used to set stratospheric bonus benchmarks have become, or are becoming, history.
When they were the masters of the universe, a record US$38 billion (S$55 billion) was dished out last year to the 186,000 US-based staff of Goldman Sachs Group, Morgan Stanley, Merrill Lynch, Lehman Brothers Holdings and Bear Stearns.
The largesse works out to an average of US$201,500 for each Wall Street denizen, reported Bloomberg.
This is four times the median income of an American household. It is also enough to buy a Porsche 911 Turbo Cabriolet, a common sight in Wall Street.
In Singapore, senior bankers performing the same role at top international financial institutions get roughly the same net after-tax pay as their counterparts in the US and other financial centres worldwide, said Mr Pan Zai Xian, a manager at executive search firm Robert Walters Singapore.
Executive pay experts here estimate that the pay package for a top investment banker last year was well over $1.5 million, including a seven-figure bonus.
Traders with the golden touch could command 'several million' as their pay was largely based on commission.
The big-league American and European banks with operations in Singapore - which include JP Morgan, Goldman Sachs, Citigroup, Merrill Lynch, Morgan Stanley, Barclays, RBS, UBS, Credit Suisse and Deutsche Bank - hire well over 30,000 staff here.
For Mr Chua, who would describe his job only as 'handling key deals for institutional clients', salaries in the past three years were in the 'decent six figures'.
This was enough for two landed property investments in prime districts, an Audi A8 luxury car and a wardrobe of branded clothes for his wife.
But with the recession looming and bonuses looking anaemic, Mr Chua has decided to go on an 'austerity drive'.
He has ditched plans to buy a BMW 7 to replace his Audi. He will also buy 'only second-hand watches' and 'not indulge in thousand-
dollar wines now'. Hundred-dollar wines will do, he mused.
It is still too early to determine exactly how much bonuses will be cut for most banking jobs in Singapore, noted Mr Mark Ellwood, managing director of Robert Walters Singapore.
Mr Chua Tek Yew, a partner at executive search firm Whitehead Mann Partnership, noted: 'The local operations are still waiting for news from their headquarters in New York about the bonus pool and budgets when the financial year closes in a few months' time.
'But it is clear that managements have already started to manage expectations of their staff, especially the top performers.'
For the more conservative European and Asian banks, pay is unlikely to be as drastically curtailed during a downturn as that at the Wall Street investment banks. The latter tend to pay much bigger bonuses during boomtime but cut more during downturns, noted Robert Walters' Mr Pan.
Layoffs at beleaguered financial institutions in the US and Europe have hit well over 20,000 to date - and counting.
European and commercial banks here may still pay out one or two months' bonus this year. But the local top investment bankers from Wall Street banks could suffer a take-home pay cut of half or even three-quarters, a headhunter with a foreign executive search firm suggested. He declined to be named, saying his estimates were 'a very rough guess'.
'Among those badly hit will be traders who relied heavily on commissions and performance bonuses,' he said.
One banker in his 30s here reckoned he might get 'an 80 per cent pay cut' as his base salary was only 20 per cent of his total package.
In the past year, his team of a handful of people had earned a
few million dollars from commissions on the structured products they had packaged and hedged risks for. Some of these products had exposure to the now-bankrupt Lehman Brothers. The commissions were split among the team.
But now business and commissions have ground to a standstill, he said.
He now spends his time on tasks that will not earn him big bucks - like sorting through 'a mountain of claims' against Lehman Brothers.
A trader with a US financial institution, who gave her name only as Ms Lin, said she 'shed a few tears' as she watched 'trading dwindle to nothing'.
'I don't have much to do now, so I've started a list of the branded goods and jewellery I plan to sell to friends on Facebook and eBay, in case my salary gets cut to half or less next year,' she said.
Ms Lin, who is in her late 20s, admitted she had bought 'some diamond pieces' with her 'high five-figure bonus' last year.
But now that she has a hefty mortgage on a new apartment in District 10, she is thinking of selling a few sparklers so that she can comfortably sustain her monthly loan payments, as well as her 'expensive addiction to Gucci and Prada'.
'There are just some things that I feel I can't do without now that I have attained this lifestyle. It's hard to downgrade a lifestyle even after your salary has been downscaled,' she said. 'I've become greedy.'
US bankers have been widely criticised for the greed that led them to pursue higher profits and bonuses - by cobbling together the complex investments linked to toxic sub-prime mortgages.
=> Sounds like the insatiably greedy Familee and its Papaya running dogs!
There is now a backlash by the American people against what is perceived as excessively high pay for the CEOs of American banks whose mistakes created the financial market maelstrom, noted headhunters.
Still, headhunters said high pay may still eventually make a comeback - even if the institutions in Wall Street and Shenton Way become drastically altered amid the consolidation in the financial sector.
Mr Pan noted: 'Greed is part of man's nature and despite whatever structures being put in place, smart people will find ways around them to make money for themselves.' [email protected]
