Bankers Resist Regulatory Restraint On Bonuses

[WestVirginiaRebel]

Yahoo News:

DAVOS, Switzerland (Reuters) - Budding bankers expecting the bumper bonuses of years gone by will have to think again, with only the top performers likely to be paid top dollar.

Business leaders and bankers at the annual Davos forum were largely dismissive of attempts to cap or restrict compensation in the financial services industry through regulation.

But they said a combination of public anger, tighter scrutiny from watchdogs, tougher performance measures and a structural fall in profitability in banking in the post-crisis world would curb the excesses of the past.

"Compared to four years ago its night and day, partially because the regulators are insisting on it...and partly because the supervisory board of banks have said we have got to balance the reward of our senior team with the reward of our long-term shareholders. And part of it is the business model has changed," a senior investment banker at a major Wall Street firm said.

Part nationalized Royal Bank of Scotland, for example, said on Saturday that Chairman Philip Hampton would not pick up a share-based bonus, amid a backdrop of public anger over a 1 million ($1.6 million) stock bonus for its chief executive.

Compensation consultants estimate bonuses for 2011 fell by about 30 percent in 2011, with payouts dropping across major banks such as Goldman Sachs and Morgan Stanley.

Year-end bonuses at Barclays Plc's investment bank are expected to be down about 30 percent this year, on average, a source familiar with the matter said on Thursday.

"Of course bonuses are falling, so is profitability," a senior European banker told Reuters on the sidelines of the conference on Saturday, following a meeting on the future of financial services involving top bankers and regulators.

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Well, you can't allow those eeevil capitalists to be too successful...